Home › Property › LMI

LMI Calculator

Estimate your lenders mortgage insurance cost based on your property value and deposit size.

Estimated LMI Cost
$0
LVR
0%
Loan Amount
$0
LMI Rate Applied
—
LMI as % of Loan
0%

LMI is typically capitalised (added to your loan). Rates are indicative — actual LMI varies by lender and insurer.

Ad Unit — Leaderboard (728×90)

What Is LMI and When Do You Pay It?

Lenders Mortgage Insurance (LMI) is a one-off premium charged when your home loan deposit is less than 20% of the property's value — meaning your loan-to-value ratio (LVR) exceeds 80%. It protects the bank, not you, in the event you default and the property sale doesn't recover the full loan amount.

LMI Rates by LVR

LMI premiums increase steeply with higher LVRs. Indicative rates used by this calculator:

  • 80% or below: No LMI required
  • 80.01%–85%: approximately 0.50% of loan amount
  • 85.01%–90%: approximately 1.20% of loan amount
  • 90.01%–95%: approximately 2.40% of loan amount
  • 95.01%–100%: approximately 4.50% of loan amount

Note: actual LMI premiums vary by lender and the two main LMI providers (Helia and QBE). Your lender obtains a quote directly. The rates above are approximations for illustration purposes only.

How LMI Is Paid

In most cases, LMI is capitalised — added to your loan balance. This means you pay interest on the LMI over the life of the loan. Some lenders allow you to pay it upfront instead. Capitalising a $10,000 LMI premium over a 30-year loan at 6% adds roughly $21,600 in total repayments.

Strategies to Reduce or Avoid LMI

  • Save a 20% deposit: The cleanest solution — LVR of 80% triggers no LMI.
  • Use a guarantor: If a parent uses their property as additional security, the effective LVR can drop below 80%.
  • First Home Guarantee (FHBG): The Australian government guarantees up to 15% of the purchase price for eligible first home buyers, allowing 5% deposits without LMI.
  • Professional package: Doctors, lawyers, accountants, and some other professionals can access LMI waivers from selected lenders.
Ad Unit — In-content (300×250)

Frequently Asked Questions

What is lenders mortgage insurance (LMI)?
LMI is insurance that protects the lender (not you) if you default on your home loan and the sale of the property doesn't cover the outstanding debt. It is typically required when your deposit is less than 20% of the property value — that is, when your loan-to-value ratio (LVR) is above 80%.
How much does LMI cost in Australia?
LMI costs vary based on your LVR and loan amount. At an LVR of 85%, LMI is typically around 0.5% of the loan amount. At 90% LVR it rises to around 1.2%, and at 95% LVR it can be 2–3% or more. On a $600,000 loan at 95% LVR, LMI could exceed $15,000.
Is LMI tax deductible?
For investment properties, LMI is tax deductible, but generally over the shorter of the loan term or five years (not all in one year). For owner-occupied properties, LMI is not tax deductible.
Can I avoid LMI?
Yes. The most common way is to save a 20% deposit (LVR of 80% or less). Other options include: using a guarantor (parent's property as additional security), qualifying as a first home buyer under the government's Home Guarantee Scheme, or working in certain professions (e.g. medical, legal, accounting) where some lenders waive LMI.
Is LMI added to my loan?
Usually yes. Most lenders capitalise LMI — that is, they add it to your loan balance rather than requiring you to pay it upfront. This means you pay interest on the LMI amount over the life of the loan, making it slightly more expensive in total.
What is LVR?
LVR stands for Loan-to-Value Ratio. It is the loan amount as a percentage of the property value. For example, a $480,000 loan on a $600,000 property is an 80% LVR. Lenders use LVR to assess risk — the higher the LVR, the higher the risk (and the higher the potential LMI cost).
Disclaimer: LMI estimates in this calculator are indicative only. Actual LMI premiums are set by the insurer (Helia or QBE) and vary by lender, loan type, and borrower profile. Always obtain a quote from your lender for exact LMI costs. This is not financial advice.

Related Calculators

Mortgage Repayment

Calculate your monthly mortgage repayments.

Settlement Costs

Estimate all upfront costs when buying a property.

Stamp Duty

Calculate stamp duty for your state.

First Home Buyer

Check first home buyer grants and concessions.

Borrowing Power

Estimate how much you can borrow from a lender.

Foreign Buyer Surcharge

Calculate the foreign buyer stamp duty surcharge by state.
Ad Unit — Bottom (728×90)