How to use the LMI calculator
- 1 Enter the property value.
- 2 Enter your deposit.
- 3 Choose whether to add LMI to the loan or pay it upfront.
- 4 Enter the interest rate and term, then read the estimate.
Worked example
A $750,000 home with a $75,000 deposit. The loan is $675,000, a 90% LVR, and the indicative premium is about $14,850 (2.2% of the loan). Adding it to the loan at 6% over 30 years costs about $17,200 in extra interest. Saving another $75,000 for a 20% deposit would avoid LMI altogether.
Paying less LMI
- Aim for 20% to avoid LMI altogether.
- Get under 90% LVR, where premiums jump.
- Use the 5% Deposit Scheme if you are a first home buyer.
- Ask about waivers for some professions.
Check the government scheme with the First Home Guarantee Calculator, your LVR with the LVR Calculator, and repayments with the Home Loan Calculator.
Features
LVR bands
Indicative premiums for 80-85%, 85-90% and 90-95% LVR by loan size.
Capitalised LMI
Shows the extra interest from adding LMI to the loan.
Ways to avoid it
Deposit needed for 20%, and links to the 5% Deposit Scheme.
When to use it
First home buyers
See if the government scheme beats paying LMI with the First Home Guarantee Calculator.
Comparing deposits
See how a bigger deposit lowers the premium. Track savings with the Savings Goal Calculator.
Borrowing
Check your loan size with the Borrowing Power Calculator.
Refinancing
See your LVR before switching with the LVR Calculator.
Related Home and Auto tasks
Frequently asked questions
What is lenders mortgage insurance?
Insurance that protects the lender if you cannot repay and the property sells for less than the loan. You pay for it when your deposit is under 20%, but it does not protect you.
How much is LMI?
It depends on the loan size, the LVR, the lender and the insurer. As a rough guide, it can be under 1% of the loan at 85% LVR and 3% to 4.5% at 95% LVR.
How can I avoid LMI?
Save a 20% deposit, use the 5% Deposit Scheme if you are a first home buyer, have a family guarantee, or use an LMI waiver some lenders offer to certain professions.
Can I add LMI to my loan?
Yes. Most lenders let you capitalise LMI, but you then pay interest on it for the life of the loan.
Is LMI refundable?
Usually not, or only partly within the first year or two if you repay the loan. It is not transferable to a new lender.
Do I pay stamp duty on LMI?
In some states, yes. Insurers may add state duty to the premium.
Is LMI tax deductible?
Not for a home you live in. For investment properties it can be deducted over five years or the loan term if shorter.
What is LVR?
Loan to value ratio: the loan divided by the property value. A $675,000 loan on a $750,000 home is 90%.
Is this an exact quote?
No. Premiums vary by insurer and lender. Ask your lender or broker for a quote.
Why does LMI jump at 90% LVR?
Insurers see a much higher risk of loss when the deposit is under 10%, so premium rates often double between the 85-90% and 90-95% bands. Getting just under 90% can save thousands.
Does every lender use the same LMI rates?
No. Lenders use different insurers or self-insure, and they set their own rates, so the same loan can attract a different premium from each lender.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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