Get an indicative idea of LMI from your loan-to-value ratio. Indicative only - not a quote, and not credit assistance.
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Lenders mortgage insurance (LMI) is a one-off premium that some borrowers pay when their deposit is below a certain threshold relative to the purchase price. Despite the name, it protects the lender — not the borrower — against a shortfall if the loan defaults and the property is sold for less than the outstanding balance.
The premium is paid by the borrower, either as a lump sum at settlement or capitalised into the loan. When it is capitalised, interest accrues on that amount over the life of the loan, which increases the total cost. A larger deposit reduces the loan-to-value ratio (LVR) and can eliminate LMI entirely or move you into a lower premium band. Some state and territory government schemes assist eligible first home buyers to reach a lower LVR threshold without requiring a larger deposit — see the first home buyer schemes guide for detail by state.
Use this estimator to understand the indicative scale of LMI before speaking to your lender or a licensed mortgage broker. It is general information only — not a quote and not credit assistance. Actual premiums are set by the insurer and depend on the specific loan, lender and LVR.
Lenders mortgage insurance (LMI) is a premium charged by a lender when a borrower's deposit is below a certain threshold relative to the property value. It protects the lender — not the borrower — against loss if the loan defaults and the property sale does not recover the outstanding balance.
The borrower pays the premium, even though the insurance protects the lender. It can be paid as an upfront lump sum at settlement or capitalised into the loan balance, which means interest is then charged on it over the loan term.
LMI is generally required when the loan-to-value ratio (LVR) exceeds 80% of the property's value or purchase price, whichever is lower. Some lenders set their own thresholds, so the exact trigger point varies. At 80% LVR or below, most lenders do not require LMI.
A larger deposit reduces your LVR and can eliminate or reduce LMI. Reaching a specific LVR threshold can move you into a lower premium band or remove the requirement entirely. Government first home buyer schemes in some states can help eligible borrowers reach that threshold with a smaller deposit.
General information from AgentBridge, a property distribution business. It is not financial, credit or property advice. For an accurate LMI figure, speak to your lender or a licensed mortgage broker.