Ubank has shaken up the mortgage market by eliminating Lenders Mortgage Insurance (LMI) on its new 10% deposit home loan — a move set to reduce entry costs for thousands of buyers.

The Flex and Neat products now allow borrowers to purchase with deposits as low as $31,000 in select urban areas, removing a significant upfront financial hurdle.

This initiative coincides with expanded government-backed schemes that already assist first home buyers through reduced deposit requirements. Ubank’s approach effectively stacks incentives, helping customers enter the property market sooner and start building equity earlier.

Chief lending officer Ray Jokhan says the offering is designed to accelerate ownership and provide a pathway to more competitive rates once borrowers reach 80% loan-to-value ratios. The bank is also promoting the product for rentvestors — those who rent in preferred lifestyle areas while investing in more affordable suburbs.

While the change increases accessibility, it may also amplify competition in lower-priced markets already constrained by supply. Nevertheless, the move highlights a growing trend among lenders to innovate around borrower affordability rather than waiting for rate cuts to spur demand.