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How Lender's Mortgage Insurance Works

LMI protects the bank, not you. Move the slider to see how cost changes with your deposit size.

What is Lenders Mortgage Insurance (LMI)?

LMI is a one-off insurance premium that protects the lender, not the borrower. It provides the bank a safety net in case you can no longer meet your repayments and the sale of the property doesn't cover the remaining loan balance. It is a one-off cost paid at settlement if you need to borrow more than 80%. You can pay for your LMI premium by having it added to your loan.

Use the slider to see how it affects your loan.

Your LVR

Strong position

You own a large share of the property. Lenders offer their best terms and no LMI applies.

50%
0%100%
Low
Interest rate pressure
Low
Repayment pressure
None
LMI cost

Over 80% LVR, LMI kicks in. Each extra 1% you borrow above 80% doesn't add a little — it adds a lot.

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