Almost everyone who takes out a home loan must pay LMI, or Lenders Mortgage Insurance – if you don’t have a deposit of at least 20%. LMI is designed to protect lenders in the event that the borrower defaults on their repayments.
Check out the video below to find out everything you need to know about the dreaded LMI, including how much, and when you have to pay.
What Determine How Much LMI I Need to Pay?
There are a number of factors that determine how much LMI you will need to pay. These include:
- The type of borrower you are. Are you self-employed? On maternity leave? Retired?
- How much the loan is. Are you borrowing $50,000, or $800,000?
- Where the property is located. LMI could be less in high-demand suburbs, as, in the event you default, the property will sell quickly.
- The LVR (loan to value ratio). If you not sure what this means, watch our LVR video.
Can LMI be Waivered?
Yes, in some cases borrowers do not need to pay LMI. Medical professionals, for example, are considered low-risk borrowers, and are exempt from LMI.
For a list of medical professionals that do not need LMI, read our blog post Home Loans for Medical Professionals.
Want to Know More?
If you’re ready to secure a home loan, or have any questions, give us a call on 1300 700 496, or fill out the form on this page. We’d be more than happy to help.