Lenders Mortgage Insurance

What is Lenders Mortgage Insurance (LMI)?

Lenders Mortgage Insurance (LMI) is insurance that protects the lender in the event that you default on your home loan. LMI does not protect you and you will still have to pay off your loan. Lenders will only apply LMI if your home loan poses a high risk to them, generally when you’re borrowing more than 80% of the purchase price or more than 60% of the purchase price when you are self-employed. 

The lenders mortgage insurance premium is a one-off fee that you will need to pay on settlement, or it will be deducted from the loan funds before they are advanced. LMI is arranged by your lender during your loan approval process, so you don’t have to worry about any additional paperwork.

On Own my own home we’ve calculated your Lenders Mortgage Insurance based on your employment status, the property value and the amount you expect to borrow from your bank. Please be aware that the rates used in the calculation are only sample rates and these may vary from lender to lender, and they may also change in the future. We will keep monitoring and updating the rates offered, and alert you through the app when there are changes that directly affect your total purchase cost. Our goal is to keep you on track with your property purchase plan.

In the case that you need to borrow more than 95% of the value of the property we have calculated your insurance premium using the 95% loan-to-value-ratio rate for your loan bracket from the table below. Please consider that rates might be higher than these and that only a few lenders might be willing to offer you a loan.

The same applies for Low Doc Loans (for self-employed borrowers). In the case that you need to borrow more than 80% of the value of the property, we have calculated insurance premium using the 80% loan-to-value-ratio rate for your loan bracket from the Low Doc LMI Rates table. Please consider that rates might be higher than these and that only a few lenders might be willing to offer you a loan.

We have also included the cost of duty the state government charges on insurance premiums. Stamp Duty on LMI is payable on the premium according to the state or territory in which the security property is located and then added to the premium.

Below are the details on what are the rates and calculation methods on each state and territory.

Regular LMI Rates

LVR under$300,000$500,000$600,000$750,000$1,000,000$1,250,000$1,500,000$2,000,000 $2,500,000 $3,500,000
60%0000000000
65%0.00420.00460.00580.00580.00580.00640.00640.00640.00640.0064
70%0.00440.00480.00660.00660.00660.00730.00730.00730.00730.0073
75%0.00460.00530.00890.00890.00890.00980.00980.00980.00980.0098
80%0.00510.00580.00960.00960.00960.01060.01060.01060.01060.0106
81%0.00570.00660.01050.01050.01050.01160.01160.01160.01160.0116
82%0.00580.00660.01050.01050.01050.01160.01160.01160.01160.0116
83%0.00810.010.01230.01230.01230.01350.01350.01350.01350.0135
84%0.00810.010.01310.01310.01310.01440.01440.01440.01440.0144
85%0.01020.01320.01510.01510.01510.01660.01660.01660.01660.0166
86%0.01050.01320.01650.01650.01650.01810.01810.01810.01810.0181
87%0.01240.0150.01830.01830.01830.02010.02010.02010.02010.0201
88%0.01240.0150.01930.01930.01930.02130.02130.02130.02130.0213
89%0.01610.02110.02470.02470.02470.02710.02710.02710.02710.0271
90%0.01810.0230.02930.02930.02930.03220.03220.03220.03220.0322
91%0.02320.02990.04040.04040.04040.04440.04440.04440.04440.0444
92%0.02320.02990.0420.0420.0420.04620.04620.04620.04620.0462
93%0.02670.03380.04360.04360.04360.0480.0480.0480.0480.048
94%0.02670.03380.04770.04770.04770.05250.05250.05250.05250.0525
95%0.02970.03730.05010.05010.05010.05510.05510.05510.05510.0551

Low Doc LMI Rates

LVR under $300,000.00 $500,000.00 $600,000.00 $750,000.00 $1,000,000 $1,250,000$1,500,000$2,000,000 $2,500,000 $3,500,000.00
60%000000000
65%
70%0.004380.006150.011460.011460.011740.011830.011830.011830.01183
75%
80%0.00680.009970.018170.018170.022920.02310.023110.023110.02311
75%0.0116
80%0.00680.009970.018170.018170.022920.02310.023110.023110.023110.0116
83%0.00810.010.01230.01230.01230.01350.01350.01350.01350.0135
84%0.00810.010.01310.01310.01310.01440.01440.01440.01440.0144
85%0.01020.01320.01510.01510.01510.01660.01660.01660.01660.0166
86%0.01050.01320.01650.01650.01650.01810.01810.01810.01810.0181
87%0.01240.0150.01830.01830.01830.02010.02010.02010.02010.0201
88%0.01240.0150.01930.01930.01930.02130.02130.02130.02130.0213
89%0.01610.02110.02470.02470.02470.02710.02710.02710.02710.0271
90%0.01810.0230.02930.02930.02930.03220.03220.03220.03220.0322
91%0.02320.02990.04040.04040.04040.04440.04440.04440.04440.0444
92%0.02320.02990.0420.0420.0420.04620.04620.04620.04620.0462
93%0.02670.03380.04360.04360.04360.0480.0480.0480.0480.048
94%0.02670.03380.04770.04770.04770.05250.05250.05250.05250.0525
95%0.02970.03730.05010.05010.05010.05510.05510.05510.05510.0551

Stamp Duty on LMI Premiums

StateRate
ACT0
NSW0
NT0.1
QLD0.09
SA0.11
TAS0.1
VIC0.1
WA0.1

How to use the tables?

These rates are an example only as LMI premiums vary between lenders and mortgage insurers.

  • If you’re applying for a normal loan use the regular LMI rates table. If you’re applying for a low doc loan then use the LOW DOC LMI rates table.
  • Work out what percentage of the property value you’re borrowing, known as the Loan to Value Ratio (LVR) by dividing the loan amount/Property value.
  • Use the table to find the applicable LMI rate for yourLVR (listed on the left hand side of the table) and loan amount (listed at the top of the table).
  • To calculate your LMI premium just multiply your LMI rate by your loan amount. 
  • Then add the stamp duty on LMI that is applicable for the state that the property is in. 
  • The Reduced Input Tax Credit has not been taken into account because the effect is less than 10% of the premium.

 

This page was last updated on 19 September 2019.