Question 1

What is Lender's Mortgage Insurance (LMI)?

Accepted Answer

LMI is a one-off insurance premium that protects the lender — not you — if you default on your loan. It applies when you borrow more than 80% of a property's value (LVR above 80%).

Question 2

Can LMI be added to my home loan?

Accepted Answer

Yes. Most lenders allow you to capitalise the LMI premium into your loan, meaning you pay it off over the life of the mortgage rather than upfront. This increases your total loan amount and the interest you pay.

Question 3

How much does LMI cost?

Accepted Answer

LMI premiums vary by lender and LVR. As a rough guide: LVR 80-85% attracts around 1.2% of the loan; 85-90% around 1.8%; and 90-95% around 3.2%. Our estimator applies these benchmark rates.

Question 4

Is LMI tax deductible for investment properties?

Accepted Answer

LMI on an investment property loan may be tax deductible, spread over the lesser of five years or the loan term. You should confirm this with a registered tax agent as individual circumstances vary.

LMI Estimator