🛡️ LMI Calculator
Estimate your Lenders Mortgage Insurance premium and see it added to your loan.
What is LMI?
Lenders Mortgage Insurance (LMI) is a one-off insurance premium you pay when you borrow more than 80% of a property's value — that is, when your deposit is less than 20%.
When do you pay LMI?
LMI kicks in when your Loan-to-Value Ratio (LVR) exceeds 80%. LVR is simply your loan amount divided by the property value.
How much does LMI cost?
LMI is calculated as a percentage of your loan amount. The rate depends on your LVR band — the higher the LVR, the higher the rate. A 95% LVR loan can attract LMI of 3–4% of the loan, adding tens of thousands of dollars to your borrowing costs. Most lenders capitalise it into your loan (add it on top), so you pay interest on it too.
Can I avoid LMI?
- Save a 20% deposit — the most straightforward way. LVR ≤ 80% = no LMI.
- First Home Guarantee — the federal government guarantees up to 15% of the purchase price, letting eligible first home buyers buy with as little as 5% deposit and no LMI. Places are limited.
- Guarantor loan — a family member (usually parents) uses equity in their own property to guarantee part of your loan, reducing the effective LVR below 80%.
- Professional exemptions — some lenders waive LMI for certain professions (doctors, lawyers, accountants) borrowing up to 90–95% LVR.
- Lender deals — occasionally lenders run promotions waiving LMI. Worth asking your broker.
Is LMI always bad?
Not necessarily. In a rising market, paying LMI to enter the market sooner can sometimes cost less than waiting years to save a larger deposit while prices climb. Run the numbers both ways before deciding. A mortgage broker can help model this for your situation.