LMI can add $5,000-$30,000+ to your home loan. We explain exactly when it applies, how much it costs, and the strategies to avoid or minimise it.
Lenders Mortgage Insurance is one of the most misunderstood costs in Australian property. Many buyers don't even hear about it until their broker or bank mentions it during the pre-approval process — by which point, they've already factored in their deposit and costs without it.
LMI is triggered when your deposit is less than 20% of the property value. The less you put down, the higher the premium. And unlike other upfront costs, LMI can run into tens of thousands of dollars — money that protects the lender, not you.
LMI catches many buyers off guard when they're told the true cost:
We know every way to avoid, minimise, or manage LMI across 30+ lenders. From government guarantee schemes to professional LMI waivers to guarantor loans — we find the most cost-effective path for your situation.
Multiple strategies exist to reduce or eliminate LMI. The right approach depends on your deposit, profession, and eligibility:
| Strategy | LMI Saving | Who Qualifies | How It Works |
|---|---|---|---|
| 20% Deposit | ✓ 100% — no LMI | Anyone with 20%+ deposit | LVR at or below 80% means no LMI required |
| Home Guarantee Scheme | ✓ 100% — no LMI with 5% deposit | First home buyers, income limits | Government guarantees 15% — lender doesn't need LMI |
| Professional LMI Waiver | ✓ 100% — no LMI up to 90% LVR | Doctors, lawyers, accountants, engineers, etc. | Select lenders waive LMI for qualifying professions |
| Guarantor Loan | ✓ 100% — no LMI at any LVR | Family member with property equity | Family equity covers the portion above 80% LVR |
| Risk Fee Instead of LMI | Partial — lower upfront cost | Some lenders offer risk fee alternative | Ongoing fee added to rate instead of upfront premium |
| LMI Rebate on Refinance | Partial — refund if refinancing within 1-2 years | Varies by LMI insurer | Some insurers offer a partial rebate if you paid LMI recently |
Every buyer's situation is different. Here are some common scenarios where understanding LMI makes a real difference to the cost of getting into property:
You've saved 10% but face $10,000+ in LMI. We check if the guarantee scheme, a professional waiver, or a guarantor can eliminate LMI entirely.
Doctors, dentists, vets, and other medical professionals can access LMI waivers from select lenders — borrowing up to 90% LVR with zero LMI.
Switching lenders but your LVR is above 80%? Some lenders have lower LMI costs than others, and we explore every option to minimise the hit.
Waiting to save 20% while prices rise means the goalpost keeps moving. Sometimes paying LMI to buy now is cheaper than waiting — we calculate both scenarios.
Use our loan assessor to estimate your borrowing power and see where LMI might apply to your purchase.
Try the Loan AssessorWe determine your loan-to-value ratio based on your deposit, purchase price, and any additional costs to understand exactly where you stand.
We check eligibility for LMI waivers (professional, guarantee scheme, guarantor) and compare LMI costs across lenders — because premiums vary significantly.
We recommend the most cost-effective approach: avoid LMI entirely if possible, or choose the lender with the lowest LMI premium if it can't be avoided.
LMI is typically capitalised into the loan. We ensure the total loan amount (including any LMI) remains within the lender's maximum LVR and your borrowing capacity.
Different lenders use different LMI insurers with different premium schedules. The same loan with the same deposit can have LMI costs that differ by thousands. We compare.
If you're a doctor, dentist, lawyer, accountant, engineer, or in certain other professions — some lenders waive LMI entirely for loans up to 90% LVR. We know which lenders offer this.
Sometimes paying $10,000 in LMI to buy now is better than waiting 2 years to save another $60,000 while prices rise. We calculate the break-even to help you decide.
If you paid LMI within the last 1-2 years and are refinancing, some LMI insurers offer a partial premium rebate. We check if this applies to you.
LMI is insurance that protects the lender (not you) if you default on your loan and the sale of the property doesn't cover the outstanding debt. It's required when your loan-to-value ratio exceeds 80% — meaning your deposit is less than 20%.
LMI costs depend on the loan amount, LVR, and the insurer. As a guide: on a $600K property with 10% deposit, LMI might cost $8,000-$12,000. At 95% LVR on the same property, it could be $15,000-$20,000+. We provide exact quotes for your situation.
Yes, through several strategies: saving a 20% deposit, using the Home Guarantee Scheme (5% deposit, no LMI), accessing a professional LMI waiver, or using a guarantor loan. We explore every available option for your situation.
Common qualifying professions include doctors, dentists, veterinarians, optometrists, lawyers, accountants, engineers, and sometimes other allied health professionals. Eligibility varies between lenders — some are more generous than others. We check all options.
LMI is typically capitalised — added to your loan balance. This means you don't pay cash upfront, but you do pay interest on the LMI premium over the life of the loan. Some lenders offer the option to pay LMI upfront if preferred.
Not automatically. However, some LMI insurers offer a partial rebate if you refinance within 1-2 years of paying the premium. The rebate decreases over time. Additionally, if you refinance with the same LMI insurer, some lenders may offer reduced premiums.
No, LMI does not transfer between lenders. If you refinance to a new lender and your LVR is still above 80%, you may need to pay LMI again. This is an important factor to consider before refinancing early — we factor this into our switch cost analysis.
Some lenders offer a 'risk fee' or 'low deposit premium' as an alternative. Instead of a large upfront premium, a small loading is added to your interest rate. This can work out cheaper for some borrowers, especially if you plan to reach 80% LVR quickly.