LMI Calculator: How Much Will You Pay?
Lenders Mortgage Insurance is the cost that hits hardest when you don't have a full 20% deposit. For a typical Australian property, it can add $8,000 to $30,000+ to your purchase costs. Yet most buyers have only a vague idea of what they'll pay until their broker runs the numbers.
Here's how to estimate your LMI cost, what drives the price up or down, and when it actually makes financial sense to pay it.
What is LMI and why does it exist?
LMI is an insurance policy that protects the lender (not you) if you default on your mortgage and the property sells for less than what you owe. Banks require it when your Loan-to-Value Ratio (LVR) exceeds 80% — meaning your deposit is less than 20%.
Two companies dominate the Australian LMI market: Helia (formerly Genworth) and QBE LMI. Each has their own premium tables, which is why LMI costs vary between lenders — they use different insurers.
LMI cost table: what you'll actually pay
Here are indicative LMI costs for different property prices and LVR bands:
| Property Price | 85% LVR (15% deposit) | 90% LVR (10% deposit) | 95% LVR (5% deposit) |
|---|---|---|---|
| $500,000 | $3,200–$5,100 | $7,200–$11,500 | $14,000–$21,000 |
| $700,000 | $4,800–$7,600 | $10,500–$16,800 | $20,000–$30,000 |
| $900,000 | $6,500–$10,200 | $14,000–$22,000 | $27,000–$40,000 |
| $1,200,000 | $9,000–$14,000 | $19,000–$29,000 | N/A (most lenders won't do 95% at this price) |
Ranges reflect different insurers and lender policies. Use our LMI Calculator for a more specific estimate.
What determines your LMI cost?
Three main factors drive LMI pricing:
1. Loan-to-Value Ratio (LVR)
The single biggest factor. LMI premiums increase exponentially as LVR rises. The jump from 85% to 90% LVR is significant, and from 90% to 95% is even steeper. Getting your LVR below 90% can save you thousands.
2. Loan amount
LMI is calculated as a percentage of the loan amount, with different percentage bands. Higher loan amounts attract higher percentage premiums — so LMI doesn't scale linearly. A $900,000 loan pays proportionally more than a $500,000 loan at the same LVR.
3. Loan type and borrower profile
First home buyers may get slightly different rates than investors. Some lenders charge more for self-employed borrowers, investment loans, or interest-only loans because these carry higher risk of default.
Can you avoid LMI?
Several ways to dodge it entirely:
- Save a 20% deposit: The obvious answer, but increasingly difficult in expensive markets where saving $200,000+ takes years
- Family guarantee: A parent uses equity in their property to guarantee part of your loan, reducing LVR below 80% without you needing the full deposit
- First Home Guarantee scheme: The federal government guarantees up to 15% of the property value for eligible first home buyers, removing the need for LMI. Limited places each year — check if you qualify
- Profession-specific LMI waivers: Some lenders waive LMI for doctors, dentists, lawyers, and accountants (up to 90% LVR) due to their perceived lower default risk
- Lender-paid LMI: Some lenders absorb the LMI cost but charge a higher interest rate instead. Run the numbers — this may cost more over the loan term
Create a dedicated deposit saver, automate your contributions, and track every dollar. Sign up and get $10 free.
Should you pay LMI or wait to save 20%?
This is the big question. See our detailed analysis in LMI vs Saving 20%: Which Is Smarter?
The short answer: in a rising market, the property price increase while you save may exceed the LMI cost. In a flat or falling market, waiting and saving more is usually better. Either way, run the actual numbers for your situation.
How to use our LMI calculator
Our LMI Calculator takes your property price and deposit to estimate the LMI premium. It shows costs across different LVR bands so you can see exactly how much more deposit would save you.
Pro tip: enter a few different scenarios. See what happens if you save an extra $20,000–$30,000. Often, pushing your deposit from 10% to 15% saves you $5,000–$10,000 in LMI — a much better return than any savings account.
Frequently asked questions
How much does LMI cost?
For a $600,000 property with 10% deposit, typically $8,000–$15,000. At 5% deposit, $15,000–$30,000. Cost increases sharply as deposit shrinks.
Can you add LMI to your home loan?
Yes, most lenders allow capitalisation. But you'll pay interest on the LMI premium over the life of the loan — potentially doubling its effective cost.
Is LMI refundable if you refinance?
Generally no. LMI is a one-time, non-refundable premium. Refinancing to a new lender may trigger another LMI payment if your LVR is still above 80%.
Who does LMI protect?
The lender, not you. If you default and the property sells at a loss, the insurer pays the bank — then can pursue you for the shortfall.
Use our LMI Calculator to see exactly how much Lenders Mortgage Insurance you'd pay at different deposit levels.
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