Estimate the cost of Lenders Mortgage Insurance based on your property price and deposit amount. LMI is required when your deposit is less than 20% of the property value (LVR above 80%).
Lenders Mortgage Insurance (LMI) is a one-off insurance premium that protects the lender (not you) if you default on your home loan. It is required when your loan-to-value ratio (LVR) exceeds 80% — meaning your deposit is less than 20% of the property price. Despite protecting the lender, the cost is passed on to the borrower.
LMI can be paid upfront at settlement or added to your loan amount (capitalised). If capitalised, you pay interest on the LMI premium over the life of the loan, which increases the total cost. On a $700,000 property with a 10% deposit, LMI can cost $9,000 to $15,000 depending on the insurer.
The actual LMI premium depends on several variables: the loan amount, the LVR, the loan term, your employment type, and the LMI provider (Helia or QBE in Australia). Higher LVRs attract disproportionately higher premiums — the jump from 85% to 90% LVR roughly doubles the LMI cost, and 90% to 95% roughly doubles it again.
Our calculator uses industry-standard tier approximations. For an exact quote, your lender or mortgage broker can request one from their LMI provider during the application process.
LMI gets a bad reputation, but it can actually be financially rational in a rising market. If property prices are growing faster than you can save, waiting to reach 20% deposit means buying a more expensive property later. The LMI cost might be less than the price growth you miss while saving. Run the numbers for your specific situation — our rent vs buy calculator can help with this comparison.
Important: LMI is not refundable if you refinance or sell early. If you pay LMI and then refinance within 2-3 years, you lose the premium. Some insurers offer partial refunds within 12 months, but this varies. Factor this into your refinancing decision.