What is LMI (Lenders Mortgage Insurance)?
Lenders Mortgage Insurance (LMI) is a one-off insurance premium that protects your lender, not you, if you’re unable to repay your home loan. It’s required when your deposit is less than 20% of the property’s value (that’s when your Loan-to-Value Ratio, or LVR, is over 80%).
The LMI premium is added to your loan amount, so you don’t need to pay it upfront, but it’s still something to factor into your budget.
How does it work?
An LMI premium is added to your loan amount at settlement, which means you’ll pay interest on it over the life of your loan.
It’s non-refundable and non-transferable—even if you refinance or sell your property.
If your loan is insured and you default, Unloan may make a claim to our insurance provider to cover any shortfall loss incurred after the sale of your property. Our Insurer may also seek repayment from you.
When is an LMI premium payable?
At Unloan, LMI applies when your Loan-to-Value Ratio (LVR) is between 80% and 90%. The cost depends on your deposit size, loan amount, and property value.
Can I avoid LMI?
Yes, by saving a larger deposit. The closer you get to a 20% deposit, the less likely you’ll need to pay LMI.
Need help?
The easiest way
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Prefer email or phone?
No problem. You can also contact us:
Email: [email protected]
Phone: 1300 630 000