LMI refund

Did you know that if you repay your home loan within the first two years then you may be eligible to receive a refund for part of the LMI premium you have paid? Many lenders do not notify their customers of this, or require them to apply to the lender to receive it. As a result, a vast majority of borrowers miss out!

If you are exiting your loan, use the below guidelines to find out if you might be eligible, then call your lender to confirm.

General requirements

As a general rule you cannot claim a refund unless the below requirements have been met:

  • The loan must not have been in default, arrears or had any late repayments.
  • The loan must have been repaid less than two years from the date it was settled.
  • The refund amount must be greater than $150.

LMI requirements

Note that these are the policies for the two main LMI providers in Australia. Each lender may have made a separate agreement with these providers and as such you should contact your lender to confirm their policy for your mortgage.

Genworth Financial

  • The lender must send a request for an LMI refund within three months from the date the loan was discharged.
  • The refund must be for more than $150.
  • The loan must not have resulted in an LMI claim.
  • The loan must not have been in arrears or default.
  • Some lenders have agreements in place which mean that their customers are not eligible for LMI refunds.
  • The loan must be discharged (repaid) within two years of the loan being settled.
  • Will refund 40% of the premium paid if discharged in the first year and 20% if discharged in the second year.

QBE LMI

  • The loan must not have been in default or arrears.
  • The refund amount must be more than $500.
  • The insured mortgage must be repaid in full (not a partial discharge).
  • A refund is due only if the loan is repaid in the first year after settlement.
  • The lender must notify QBE LMI that a refund is due within 30 days of the loan being discharged.
  • The amount of the partial refund will depend on the arrangements between QBE and the lender.

Lender requirements

You should always contact your lender for information regarding the refund of an LMI premium.

  • Adelaide Bank: Uses QBE or Genworth policy, automatically applies for LMI refunds at the end of each month.
  • ANZ Bank:No LMI refunds are available.
  • BankWest: Will refund 25% if the loan is repaid in the first 12 months.
  • CBA: No LMI refunds are available.
  • Liberty Financial: 30% of the LMI premium is refunded if you repay the loan in the first year and 15% if you repay the loan in the second year. You must request the refund.
  • Homeside Lending: No LMI refunds are available.
  • NAB: No LMI refunds are available.
  • St George Bank: 40% of the LMI premium is refunded if you repay the loan in the first year and 20% if you repay the loan in the second year.
  • Westpac Bank: 40% of the LMI premium is refunded if you repay the loan in the first year and 20% if you repay the loan in the second year. You must request the refund

Not all lenders publish their refund policy or procedure. However, we recommend that you assume your lender will require you apply for a refund. It is best to contact them and confirm their refund policy once your loan has been discharged.

How to request a refund

Call your lenders customer service department and explain to them that you are requesting an LMI refund. They will then inform you of their procedure and may ask that you provide them with a written request.

Premium refunds can take upwards of three months as they are processed in batches, however we recommend that you follow up regularly to make sure that your refund is processed. This type of request is not classified as urgent by most lenders, so it is likely to be forgotten if you are not diligent.

Save money on your LMI premium

For your next home loan, why don’t you shop around to find the lowest LMI premium as well as the lowest interest rate. Each lender has a different agreement with their mortgage insurer and so has different premium rates. In some cases, lenders also offer discounts or special offers for a limited time. Please visit our mortgage insurance calculator page to compare premiums.