LMI providers and insurers

Who are the mortgage insurers?

Father and son at the beachMortgage Insurers are insurance companies that assist banks to lend over 80% of the property value by taking on the risk of the loans in return for an insurance premium. This type of insurance is known as Lenders Mortgage Insurance or LMI for short.

The two big mortgage insurers

Australia has two main mortgage insurers that dominate the LMI market. Most lenders work with one of these on an exclusive basis, work with both insurers or have their own insurer that is backed up behind the scenes by one of these companies.

  • Genworth Financial: Genworth operates in over 25 countries, has 15 million customers and in Australia deals with over 100 different lenders. Since 1965 Genworth has insured over $300 Billion worth of home loans in Australia alone.
  • QBE LMI / PMI: The QBE Group is a top 25 company in the global insurance market and has insured loans in Australia, New Zealand as well as throughout Asia. QBE LMI was previously known as PMI which was part of an American owned mortgage insurer.

Other providers

There are several other smaller LMI providers, some of which are owned by the lenders they insure. Note that some lenders charge a fee instead of an LMI Premium. This is known as a Risk Fee, Loan Extension
Fee (LEF), Low Deposit Premium (LDP) or Reduced Equity Fee (REF) however it is effectively the same as LMI.

  • CBA LDP
  • St George Insurance (SGI)
  • St George LEF
  • ANZ LMI
  • Westpac LMI (WLMI)
  • MRM Pty Ltd / Widebay Australia LMI
  • Rams Risk Fee
  • ING REF

Which LMI company is the cheapest?

The LMI companies have significantly different premiums for different types of loans (low doc / normal), types of borrowers (first home buyers / other borrowers), LVRs (90%, 95% etc) and loan amounts. For this reason there is no one “best” LMI provider. Please enquire online to contact one of our mortgage brokers and we’ll help you find a lender with a competitive interest rate and a low LMI premium.

Can I choose my LMI provider?

No, the lender chooses the mortgage insurer that will insure your loan and usually has an exclusive agreement with just one or two mortgage insurers. For this reason the best way to get the cheapest LMI is to apply for a loan with a lender that uses a provider with the cheapest LMI premium.

Apply for a home loan

Here at the Home Loan Experts our mortgage brokers have extensive knowledge of the Lenders Mortgage Insurers and their respective LMI premiums. Please contact us to discuss your situation with a mortgage broker.