Lenders Mortgage Insurance (LMI)
is generally applicable when borrowing over 80% of the property value. There can be huge differences in your LMI premium depending on the LVR and the lender you choose.
Let’s say, you were borrowing $475,000 to purchase a $500,000 house at 95% LVR, the LMI premium can be anywhere between $14,450 and $16,198. By choosing the right lender you can save up to $1,748.
You can use our LMI calculator
for a more detailed breakdown of LMI premiums from six lenders including CBA, NAB and ANZ.
Some of our lenders allow you to capitalise the LMI, which essentially means adding the LMI on top of your home loan. This way, you won’t have to pay the LMI upfront.
You may qualify for waived LMI
or a reduced premium if you’re able to meet the below requirements:
- You’re not borrowing over $800,000 and must be for no more than 95% of the property value plus LMI.
- You’re borrowing to buy a property and not for refinancing an existing mortgage.
- You have at least 5% in genuine savings.
- The main income earner must have been in their job for at least 2 years (the borrower with the lower income must be over 6 months in their job, if applicable)
- Your credit file should be free of any black marks with a solid credit history.
- The property must be located in a capital city or a major regional centre.