What is Lender's Mortgage Insurance (LMI)?

LMI is a one-off premium charged by the lender (and usually paid by the borrower) when the loan-to-value ratio is above 80%. It protects the lender, not the borrower, if the loan defaults and the property sells for less than the outstanding balance.

The standard route is a deposit of 20% or more (≤80% LVR). Other routes include: a guarantor loan secured against family equity, a professional waiver scheme (medico, accountant, solicitor and similar, varies by lender), or one of the federal Home Guarantee schemes (FHBG, FHG, RFHBG) which let eligible buyers borrow up to 95–98% LVR without LMI.

Can LMI be added to the loan?

Yes, most lenders capitalise LMI into the loan amount, so you don't pay it upfront. The trade-off is that you pay interest on the LMI premium for the life of the loan.

Is LMI ever refundable?

Partially, in narrow circumstances. Some lenders refund a sliding portion if you discharge the loan within the first one or two years. Beyond that window, LMI is non-refundable, and switching lenders means paying a fresh premium if you're still above 80% LVR.

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LMI estimator, what insurance actually costs

Lender's Mortgage Insurance kicks in above 80% LVR and protects the lender, not you. Below is an indicative premium based on blended insurer rate cards, actual quotes vary by lender.

Property value$

Loan amount$

LVR: 90.0%

Loan type

Investor loan (~12% loading)Self-employed / low-doc (~18% loading)

Estimated LMI premium

$17,456

LVR 90.0% on a owner-occupier loan. Premium reflects LMI insurer rate × $720,000 loan, plus ~10% LMI stamp duty.

Monthly cost if capitalised

$105

Indicative @ 6% / 30y if added to the loan

Deposit needed to avoid LMI

$80,000

Top-up to reach 80% LVR

Premium grid blended from publicly disclosed Helia / QBE / CBA / Westpac LMI rate cards (2024-25). Your actual quote will depend on your specific lender’s arrangement with their LMI provider.

How LMI actually works

You pay it. The lender keeps it.LMI is a one-off insurance premium that reimburses the lender if you default and the sale of the property doesn’t cover the outstanding loan. It does nothing for you, but it’s the price of admission for borrowing above 80% LVR.

The premium grows non-linearly with LVR. A $700k loan at 81% LVR might cost $5k. The same loan at 95% LVR can exceed $30k. Pushing your deposit up by even 1% can save thousands.

Most lenders let you capitalise it, meaning the premium gets added to your loan balance and amortised over the term. That spreads the pain but you pay interest on the LMI for 30 years.

LMI waivers exist for medical professionals, lawyers, accountants, and military personnel, sometimes up to 90% LVR with no premium at all. Worth asking a broker about if you qualify.

Want a real number, not a ballpark?

These figures are estimates. A 30-min broker consult will run your specific scenario against the actual lender policies, no fees, no obligation.

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Important: This calculator provides an estimate only and does not constitute credit advice. Actual rates, repayments, fees and approval are subject to lender policy and your individual circumstances. Comparison rates are based on a $150,000 loan over 25 years on a secured basis, see footer for the full disclaimer.

How much is LMI in Australia?

Lender's Mortgage Insurance is a one-off premium charged when you borrow more than 80% of a property's value, and it rises steeply as your deposit shrinks. On a $600,000 loan it is nil at 80% LVR, roughly $8,000 at 85%, $15,000 at 90%, and about $25,000 at 95%. It can usually be added to the loan rather than paid upfront.

LVR	Deposit	Indicative LMI ($600k loan)
80% or less	20% or more	$0 (no LMI)
81 to 85%	15 to 19%	around $8,000
86 to 90%	10 to 14%	around $15,000
91 to 95%	5 to 9%	around $25,000

Indicative ranges only. Actual premiums vary by insurer (Helia, QBE) and lender; use the calculator above for a per-scenario estimate.

How can I avoid paying LMI?

The clean route is a 20% deposit (an 80% LVR), but there are three common ways to skip LMI with less: a guarantor loan secured against a family member's equity; a professional waiver (many lenders waive LMI to 90%, sometimes higher, for doctors, accountants, lawyers and some other professions); or the federal Home Guarantee Scheme, which lets eligible first home buyers borrow up to 95% with no LMI. Weigh the LMI you would pay against a slightly higher rate on a low-deposit loan, sometimes paying the LMI on a sharper rate still wins.

Is LMI worth paying to buy sooner?

Often, yes. LMI lets you buy years earlier than saving a full 20% deposit would allow, and in a rising market the capital growth you capture in those extra years can dwarf the premium. The risk runs the other way in a flat or falling market, where you have paid a large non-refundable premium and built little equity. Model both the premium here and your repayment with the repayment calculator, and see what deposit size unlocks the sharpest rates on the low deposit home loans page.