Estimate how much Lenders Mortgage Insurance (LMI) you’ll pay when buying a property or refinancing.
LMI usually applies when you borrow more than 80% of the property’s value. It protects the lender if you’re unable to repay the loan. It doesn’t cover your repayments if you lose your job or become ill.
Enter your property value, loan amount and property details below to get an estimate. We’ll help you check whether a discount or exemption applies to your situation.
How much is Lenders Mortgage Insurance?
Your LMI cost depends mainly on your loan amount, deposit and lender, so there’s no single price that applies to every borrower.
The proportion of the property’s value you borrow is called your loan-to-value ratio, or Loan-to-Value Ratio (LVR). A smaller deposit means a higher LVR, which generally increases the premium.
For example, on a property valued at $800,000:
- A $160,000 deposit leaves a $640,000 loan and an 80% LVR.
- An $80,000 deposit leaves a $720,000 loan and a 90% LVR.
- A $40,000 deposit leaves a $760,000 loan and a 95% LVR.
These examples exclude buying costs and any LMI added to the loan. They show your borrowing percentage, not the insurance premium.
The 3 Golden Rules For LMI Premium
Many Australians don’t know what Lenders Mortgage Insurance (LMI) is, even though it can cost you literally thousands of dollars in upfront costs. How can you reduce your LMI premium and save thousands? Download this guide to know.
How can we get you a better deal?
We compare suitable loans using their LMI costs, interest rates, fees and eligibility requirements.
At Home Loan Experts, our comparison starts with your circumstances and the loan features you need. We then check relevant lender options and available discounts.
For a useful comparison, keep the loan amount and term consistent. Ask to see the cash needed at settlement and the repayments if LMI is added to the loan.
Call 1300 889 743 or complete our online assessment form to discuss your options.
Simplify the mortgage maze with the 360° Home Loan Assessor
Get results on:
- Your maximum borrowing power
- The hidden costs of buying a home
- Interest-rate options based on your situation
Will the mortgage insurer approve your loan?
Approval depends on meeting the lender’s requirements and the mortgage insurer’s requirements where LMI applies.
An LMI estimate only prices the insurance. It doesn’t assess your income, credit history or ability to repay.
The assessment also considers the property and how you’ve accumulated your deposit. Requirements differ between applications, so having enough money for the premium doesn’t guarantee approval.
Tell us early if part of your deposit is a gift, your income varies or the property is unusual. Those details help us assess suitable options before you apply.
How Do I Find A Lower LMI Premium?
Compare lender quotes for the same borrowing scenario, then check whether changing your deposit reduces the cost.
Ask for each quote to show:
- The loan amount before LMI.
- The property value used.
- The total premium, including applicable taxes.
- The loan balance if LMI is added.
- Any discount or waiver applied.
Check that both quotes use the same assumptions. A lower estimate based on a smaller loan isn’t a like-for-like comparison.
Can I Get A Home Loan Without LMI?
Yes, if you meet a lender’s standard deposit requirements or qualify for an exemption or another eligible arrangement.
Common options include:
A deposit of 20% or more
Borrowing no more than 80% of the lender’s accepted property value usually avoids LMI. Keep buying costs separate when calculating how much deposit you have.
An occupation-based waiver
Some lenders waive LMI for eligible professions. For example, Westpac publishes waivers for certain healthcare professionals, with different income and borrowing limits across occupations. Your job title alone doesn’t establish eligibility.
A government-backed scheme
The Australian Government 5% Deposit Scheme allows eligible first-home buyers to purchase with a minimum 5% deposit without LMI. Eligible single parents and legal guardians have a minimum 2% deposit pathway. Property price limits, lending requirements and ongoing conditions apply.
A guarantor arrangement
Some lenders accept a family member’s property as additional security. This involves financial obligations for the guarantor, so everyone needs to understand the arrangement before proceeding.
Avoiding LMI doesn’t remove the need to demonstrate affordable repayments.
Which Lenders Use Lenders Mortgage Insurance?
Many Australian lenders use LMI for eligible low-deposit loans, but some use a different fee or arrangement.
For example, CommBank states that either LMI or its Low Deposit Premium applies in relevant circumstances. The product and application determine which charge is used.
Ask the lender to identify the charge in writing. A loan advertised without LMI still needs checking for other fees and its total cost.
Do I Pay Stamp Duty On LMI?
Insurance duty depends on the applicable state or territory rules, and exemptions apply in some locations.
For example, LMI policies over NSW property are exempt from insurance duty where the premium was paid on or after 1 July 2017.
Insurance duty is separate from the transfer duty charged when buying a property. An exemption from one doesn’t automatically provide an exemption from the other.
Ask whether your LMI quote includes all applicable taxes so you don’t add them twice when budgeting.
Can I Get An LMI Refund?
A partial refund is available under some lender arrangements, but it isn’t automatic.
Helia states that some borrowers qualify if they repay their loan within two years of settlement. Other arrangements provide an upfront discount instead of refund rights. Contact your lender to check the conditions attached to your loan.
Don’t include a refund in your refinancing budget until your lender confirms the amount and eligibility.
Can I Add LMI To My Home Loan?
Yes, some lenders allow you to add LMI to the loan, subject to their borrowing limits and approval. This reduces the amount you pay upfront, but increases your debt and the interest charged over time.
For instance, a $720,000 loan with let’s say a $15,000 LMI charge becomes $735,000 if the whole charge is added..
Creating An LMI Quote
We’ll need your property details, deposit, requested loan amount and financial circumstances to help obtain a quote.
Prepare the following:
- Property address or expected location and purchase price.
- Deposit amount and where the funds came from.
- Income, employment and occupation details.
- Existing loans, credit commitments and living expenses.
- Whether you’re buying a home, investing or refinancing.
Your final premium can differ from the calculator estimate because the assessment considers details such as the loan purpose, borrower and property type.
Trust Home Loan Experts To Help You
We’ll help you compare LMI costs and check relevant low-deposit options before you choose a loan.
Call 1300 889 743 or complete our online assessment form. Have your calculator result ready so we can discuss the assumptions behind it.
Creating an LMI quote
Our mortgage insurance calculator is updated regularly.
However, there are other factors the LMI calculator cannot consider.
Some lenders have different sets of LMI premiums depending on the nature of your application or they may have premium loadings for particular loan purposes.
For an exact quote, please contact one of our mortgage brokers by calling 1300 889 743.
Our LMI calculator asks for more information than other calculators you may find online.
In this way, it can give a more accurate result by:
- Confirming which lenders/mortgage insurers are likely to accept your mortgage application.
- Using the state you’re in to calculate the stamp duty on your LMI premium correctly.
- Determining whether you may be eligible for a special discount or waiver.
If you’re ready to apply for a home loan, please call us on 1300 889 743 or enquire online.
A Home Loan Experts mortgage broker will give you a call to discuss the cheapest LMI premiums available for your situation.
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