how much is lmi

LMI (Lenders Mortgage Insurance) is an insurance premium that borrowers usually pay when borrowing more than 80% of a property's purchase price. The cost of LMI depends mainly on the loan-to-value ratio (LVR), the loan amount, and the lender's policies. Typically, LMI costs range from about 1% to 5% of the loan amount. For example, if purchasing a home valued at $380,000 with a $20,000 deposit (making the LVR about 94.74%), the LMI premium can be up to $13,428. If buying a $500,000 property with a 5% deposit, LMI could be around $15,752, whereas with a 10% deposit on the same property, it might be around $13,227. LMI premiums vary between lenders and states; some states add stamp duty to the LMI premium. There are ways to potentially avoid LMI, such as having a 20% deposit, using a guarantor, or government schemes with lower deposit requirements. In summary, LMI typically costs thousands of dollars and is based on the loan amount and how much less than 20% the deposit is, often ranging from 1% to 5% of the loan amount, with actual dollar amounts depending on property value and LVR.