Lenders Mortgage Insurance (LMI)

LMI is an insurance policy that protects the lender (not you) in case you default on your home loan. It's typically required when your deposit is less than 20% of the property value (i.e., your Loan-to-Value Ratio exceeds 80%).

Key facts about LMI:

• LMI is a one-off premium, usually paid at settlement
• It can be added to your loan balance (capitalised), meaning you pay interest on it
• The cost depends on your LVR, loan amount, and the LMI provider
• LMI is non-refundable and non-transferable between lenders
• It protects the lender, not the borrower — you could still owe money if you default

There are several legitimate strategies to avoid or minimise LMI:

• Save a 20% deposit — The most straightforward way to avoid LMI
• Guarantor loan — A family member provides additional security, removing the need for LMI
• First Home Guarantee — Government-backed scheme allowing 5% deposit with no LMI
• Professional offers — Eligible professionals (lawyers, accountants, doctors) can get LMI waivers
• Lender promotions — Some lenders periodically offer LMI waivers for certain products

We assess all available options and recommend the most cost-effective path for your situation.