What is Lenders Mortgage Insurance and when do I need to pay it?

Lenders Mortgage Insurance (LMI) is required when you borrow more than 80% of the property value — that is, when your LVR (Loan to Value Ratio) exceeds 80%. It protects the lender (not you) if you default and the property sells for less than the outstanding loan. LMI costs typically range from $3,000 to $30,000+ depending on the loan amount and LVR.

How much does LMI cost on a $750,000 property with a 10% deposit?

With a 10% deposit ($75,000) on a $750,000 property, your loan amount is $675,000 at an LVR of 90%. LMI on this loan typically costs $12,000–$17,000 depending on the lender. LMI can be paid upfront or capitalised into the loan — if capitalised, you also pay interest on the LMI amount over the loan term.

How can I avoid paying LMI on a home loan?

LMI can be avoided by: (1) saving a 20% deposit, (2) using the First Home Guarantee scheme (5% deposit, government guarantees remaining 15% — no LMI required), (3) using a guarantor loan where a parent's property provides security, or (4) qualifying for an LMI waiver (some lenders offer waivers for medical professionals, lawyers, accountants, and other qualifying professions). A broker can identify which LMI waiver options apply to your profession.

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Estimate your Lenders Mortgage Insurance cost for deposits under 20%. See when LMI applies, how much it costs, and how to reduce or avoid it.

How much does LMI cost in Australia?

LMI is required when your deposit is less than 20% (LVR above 80%). On an $800,000 property with a 10% deposit, LMI typically costs $12,000–$18,000. On a $600,000 property at 90% LVR, LMI is typically $9,000–$14,000. LMI can be capitalised into the loan — but you then pay interest on it over the full loan term.

•First Home Guarantee: buy with 5% deposit and no LMI (government guarantees the remaining 15%)
•Guarantor loans: a parent's property as security can eliminate LMI even with a small deposit
•LMI waivers available for doctors, nurses, lawyers, accountants, and some other professions at up to 90% LVR
•The LMI saving from a 20% deposit is often less than the opportunity cost of saving longer — a broker can help you weigh it up

Ask about LMI waiver options for your profession

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This calculator provides estimates only. Actual LMI premiums vary by insurer and lender. Professional packages may offer LMI waivers for eligible occupations.

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Could You Avoid Paying LMI?

The First Home Guarantee, guarantor loans, and profession-specific LMI waivers can eliminate LMI entirely — even with a small deposit. A broker can check your eligibility across all pathways in one conversation.