Lenders Mortgage Insurance

Lenders Mortgage Insurance (LMI) is a one-off, non-refundable, non-transferrable premium that's added to your home loan. It's calculated based on the size of your deposit and how much you borrow. The more you contribute to the purchase price of your property, the lower the cost will be. LMI protects the bank against any loss we may incur if you are unable to repay your loan.

The circumstances of your home loan will determine whether LMI or a Low Deposit Premium (LDP) may apply. This includes when you restructure your home loan, top it up or refinance. This is because there may be an increased risk associated with each application.

We require you to take out LMI where there is an increased risk associated with your loan. 

Example

• If you want to buy a house that’s worth $500,000, we would typically require you to have a deposit of $100,000 (20% of the property’s value). If you’ve only saved $50,000, but you have sufficient income to support the loan, you may be able to take advantage of Lenders Mortgage Insurance. We would then lend you the $450,000 needed to buy your new home. 

Our Home Lending Specialists can help explain when Lenders Mortgage Insurance may apply to your home loan, as well as how much it will cost. 

Download our Low Deposit Options guide (PDF)

• Enter the property market sooner by taking out a home loan with a smaller deposit
• Stop paying rent
• Start growing equity in a home
• By having LMI or LDP, you won't need to rely on a guarantor to supply additional security to secure your home loan