Borrowing more than 80%? See roughly what LMI could cost.
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Lenders mortgage insurance is a one-off premium most lenders charge when you borrow more than 80% of the property value. It protects the lender if you default, not you, and is usually added to the loan.
The premium rises steeply with the loan-to-value ratio and loan size. Eligible first home buyers can avoid it with the government's 5% deposit scheme, and some professionals get LMI waivers.
| Property price | 700,000 $ |
| Deposit | 70,000 $ |
| First home buyer? | No |
| Estimated LMI premium | $11,290 – $16,934 |
| Loan-to-value ratio | 90% |
| Loan | $630,000 |
| Deposit for 20% (no LMI) | $140,000 |
$11,290 – $16,934.
| Property price | 500,000 $ |
| Deposit | 75,000 $ |
| First home buyer? | No |
| Estimated LMI premium | $3,060 – $4,590 |
| Loan-to-value ratio | 85% |
| Loan | $425,000 |
| Deposit for 20% (no LMI) | $100,000 |
$3,060 – $4,590.
Often about 1.5–2.5% of the loan — roughly $10,000–$16,000 on a $630,000 loan.
Save a 20% deposit, use the 5% Deposit Scheme for first home buyers, a family guarantee, or an LMI waiver for eligible professions.
Sometimes partly, if you repay or refinance within the first year or two, but usually not.
Yes, most lenders capitalise it, which increases the LVR slightly and the interest you pay.