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Lenders Mortgage Insurance (LMI) Calculator

Estimate LMI for your home loan

Lenders Mortgage Insurance ('LMI') is a fee most lenders charge you when you borrow more than 80% of your property's value. This cost will vary depending on your lender.

How to use our LMI calculator

Our lenders mortgage insurance calculator automatically estimates your amount based on your Loan-to-Value (LTV) ratio. After that, you can speak to a member of our team for a consultation on your unique situation and what we can do about it.

Simply enter your loan amount in the top field alongside the property value in the lower field, and we’ll provide you with an estimated amount based on that information.

If you’re a first home buyer, your potential LMI can also be affected by certain factors such as:

  • Discounts, depending on your lender & circumstances
  • FHLDS (First Home Loan Deposit Schemes)
  • Stamp duty concessions
  • Other Government grants


What is LMI?

Lenders Mortgage Insurance - or 'LMI' - is an insurance policy that the borrower pays to protect the lender when said borrower can’t pay the initial 20% down payment and/or the LTV ratio is more than 80% of the property price.

Who does LMI cover?

LMI ensures that the lender is protected against potential losses if the borrower defaults on their mortgage repayments, making high LTV loans less risky for the lender (but more accessible to borrowers).

Is LMI a one-off payment?

LMI is a one-off payment based on the LTV ratio of the sale. However, it can also be capitalised and merged into the loan to be paid off monthly as part of the regular repayments. It’s important to note that this will additionally increase the interest rate on the entire loan, so be sure to discuss it with a qualified mortgage adviser/broker first.

Understanding the cost of LMI

LMI is difficult to generalise as it’s calculated differently for each individual based primarily on their credit score and LTV ratio, among other factors. Somebody with a low credit score and a higher LTV ratio may be charged a high LMI proportionate to their loan, whereas someone with a high credit score and a lower LTV ratio may be charged a smaller LMI for the same loan.

The actual final cost to pay LMI depends on a whole host of factors, such as:

  • Loan amount: The main purpose of an LMI is to mitigate some of the risks to the lender proportionate to the amount being borrowed. In short, the more borrowed, the higher an LMI may be charged.
  • Loan-To-Value (LTV) ratio: How much you borrow vs how much the property is worth. Most LMIs are charged on loans above the 80% mark.
  • Loan type: The types of loans can also influence LMI by way of higher perceived risk and associated potential costs, such as construction loans.
  • The borrower's credit score and employment: Your credit score directly contributes to your borrowing power, and often charges such as LMI are based on your employment, e.g how much you make and how stable your income is. The risk to the lender is assessed by considering the borrower’s situation.
  • Property price: The value of the property involved in the sale, as well as the loan amount itself, contributes to the LTV ratio and, thus, the LMI too.

It's important to discuss this with your lender/mortgage broker to get the full picture, as the costs to pay LMI can change depending on your circumstances and the lender’s preference.

How to avoid LMI

The borrower can see LMI as a financial penalty for not being able to make the full deposit on a high LTV loan. As such, it’s better to view it as a last resort if other options are available.

Here's a few of our team's tips on avoiding LMI:

1. Save more for a deposit

The most direct way to reduce or avoid LMI, ideal for when time isn’t a factor. Setting a goal, budgeting, and automating your savings can go a long way to reaching your desired deposit. You can also discuss opening a high-interest savings account with your bank specifically for the deposit on your loan.

2. LMI waiver for professionals

The easiest option, but with a selective criteria that varies between different lenders. Professionals in certain high-paying or high-stability employment may be eligible to apply for an LMI waiver (or at least a reduced LMI premium) when applying for a home loan.

Some of the most common examples of employment to qualify for an LMI waiver include:

  • Medical: Hospital workers, doctors, nurses, paramedics, specialists
  • Legal: Lawyers and associated consultants, judges, security, and law enforcement.
  • Financial: Bankers and financial consultants, accountants, tax professionals.
  • Engineering: Architects, engineers, technicians, mechanics.
  • Mining: Miners and anyone who works within a mining operation, including management

3. Provide a guarantor

Ideal for business partners or couples, but applicable where anyone is willing to accept the responsibility. Offering a guarantor can reduce the risk to the lender and qualify a borrower to forego any Lender's Mortgage Insurance. The guarantor can even be released from their role further down the line when more of the loan has been paid off, depending on the loan terms.

4. Get a better home loan deal

A lengthy but highly rewarding approach to obtaining an ideal home loan, tailored to your situation by yourself or a hired professional. Requiring an LMI premium doesn't just depend on you, the borrower. Every lender considers their approach to this differently, and shopping around can increase your odds of finding a lender willing to offer you a better home loan deal or negotiate LMI alternatives that work best for you.

That's where we come in to play!

How to Get a Better Rate with our mortgage brokers

From start to finish, our experienced mortgage brokers can guide you through this entire process step-by-step. We’re a team of seasoned veterans with a reputable history of successfully navigating the often nebulous intricacies of mortgage financing.

From finding the best possible home loan deal for you all the way to when you make your final payment. We can negotiate the terms of an LMI on your behalf, LMI alternatives, waivers, guarantors, and find an LTV that works best for you and your budget.

As a team of professionals in this field, our highest priority is to get you a better interest rate on your property's price, increase your borrowing power, reduce upfront costs, and to help you potentially save thousands with personalised solutions tailored to your budget, your circumstances, and your goals.

Get in touch with Get a Better Rate

Lenders Mortgage Insurance FAQs

Is LMI tax deductible?

Not for owner-occupiers who intend to live in the property, but investors can claim the cost of an LMI on a rental property as a tax deduction. We recommend consulting a tax professional who can advise how LMI affects your particular tax circumstances.

Does LMI affect interest rates or loan repayments?

An LMI premium doesn't directly affect interest rates when paid as a lump sum, upfront. However, if you choose to capitalise your LMI and add it to your total monthly repayments, it can inflate the overall loan balance and increase the interest rates in the long run.

Does LMI need to be paid upfront?

LMI needs to be paid upfront at the beginning of the loan. It can be paid as a lump sum or by adding it to the total loan and then via the same monthly repayments.

Does LMI include stamp duty?

Stamp duty and LMI are two separate costs. Stamp duty is a tax from the government whereas LMI is an insurance policy required by the lender. They are unrelated, but a

Does LMI vary per State or Territory?

LMI is only dependent on the circumstances of the loan, such as the LTV, lender policies, and deposit paid. Not location. Stamp duty, on the other hand, does vary between states and territories.

Can I get an LMI refund?

If your loan is refinanced or paid off within a certain amount of time (typically two years) of taking it out, you can apply for a partial refund of your LMI. The factors, such as the time frame and refund amount, must be discussed during the negotiation of the contract with the lender.

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