Lenders Mortgage Insurance

What is Lenders Mortgage Insurance?

LMI is a type of insurance that protects your lender (not you) in case you default on your home loan and there is a shortfall because of it. The fee the lender charges you for LMI can be many thousands of dollars and is generally added to your home loan account.

What if I refinance?

You may get a refund of some of the LMI premium you pay if your loan is paid out in the first year or two. But if you refinance your home loan, you may have to pay a new LMI premium (especially if you are increasing your loan amount).

What are the fees?

The lender will normally charge you a one-off fee to cover the insurance if your LVR is greater than 80%. LMI can be avoided by saving more, buying for less, or using a family guarantee to help you get the 20% equity.

Is LMI a flat rate?

LMI varies based on how much deposit you have, and how expensive your house is. Here are some examples, but note too, the LMI premium also changes based on the bank you borrow from.

Cost of property


Cost of LMI
5% deposit

Cost of LMI
10% deposit

Cost of LMI
15% deposit

Quotes taken from Genworth LMI calculator, correct as at 3/5/2019.
Based on first homeowner purchase and loan term of up to 30 years.