What’s Lenders’ Mortgage Insurance (LMI)?

It’s a type of insurance that’s applied to your home loan if your deposit is less than 20%. It’s used to protect your lender if you have trouble with your mortgage repayments down the track.

You can usually avoid paying LMI if your deposit is at least 20% of your property’s value – but saving can take a long time, so LMI is an alternative option to get into your home sooner.

How much does LMI cost?

It’s based on the value of the property, how much deposit you have and the total loan amount. There may be other factors that influence the cost, but a Home Finance Manager can let you know if any apply.

How do I pay LMI?

It’s a one-off payment and depending on your situation, you could pay it at settlement or add to your home loan. If you’re adding it to your home loan, just be aware you’ll be paying interest on it.
 

Is LMI refundable?

It isn’t refundable after the first year. If you decide to repay your home loan, refinance or switch to another lender within the first year, then you may be eligible for a partial refund.
 

For more detailed information

Understand the terminology

Home loan glossary

Need more help?

If you still need help you can speak to someone from the team.