Lenders Mortgage Insurance Calculator

What is LMI?

When you apply for a mortgage that is for more than 80% of the property price, Lenders Mortgage Insurance is being activated and you have to pay a once off fee. The lender gets the insurance on your loan, so in case you stop paying, they will not lose any money. The borrower is not being covered by the insurance, yet he still has to pay for the insurance premium.

How much it costs?

LMI is calculated on a scale based on the price of the house you are offering as security, percentage of the value that you are borrowing and the size of your loan.

Do I have to save up to pay my Lenders Mortgage Insurance?

No, most lenders give you the option to add the premium onto your loan. So, in case your LMI premium was $4,000 and your loan was $400,000 then the lender would lend you $304,000 in order to not change the deposit you would need to buy that house.

Can I save on my premium?

You can reduce significantly your outlay by reducing the amount which your borrow. Ask your parents, for example, whether they can help you with a larger deposit or if they are willing to guarantee your loan using their house. If you do this, then most probably your loan will go under 80% of the property value and you will not pay Lenders Mortgage Insurance at all!

Is there a LMI calculator I can use?

Yes, you can use a lenders mortgage insurance calculator to work out the exact cost for your loan. It will save you both time and efforts.