Lenders mortgage insurance calculator

If you’re borrowing more than 80% of the purchase price of a home, you’ll need to pay Lender's Mortgage Insurance (LMI).


Please Note: The results provided by this calculator are only applicable for loan terms of up to 30 years.

Saving that elusive 20% deposit can be a struggle, but it is possible to purchase a property with less than this if you’re willing to cop an additional fee: Lender’s Mortgage Insurance (LMI).

While LMI may seem like yet another cost meant to burden home buyers, LMI can actually help those with the bare minimum 5% deposit get into the market sooner before property prices rise even further.

What is Lender’s Mortgage Insurance?

LMI is an insurance policy that covers the mortgage lender against any losses they may incur if the borrower defaults on the loan. LMI does NOT cover the borrower - it only covers banks and lenders.

LMI is widely considered a win for those carving out the path to home ownership because it allows the borrower to go in with a smaller deposit, enabling them to get into the market sooner.

There are two main LMI providers in Australia: Genworth Financial and QBE.

How much does LMI cost?

LMI can be a big expense and can cost anywhere from a few thousand dollars up to tens of thousands of dollars. This is why it’s important to factor this cost into your overall buying budget.

The cost of LMI can vary based on a few factors including:

  • If you’re a first-home buyer

  • Which state your property is in

  • If you’re an owner occupier or investor

  • The size of the loan

  • Your loan-to-value-ratio (LVR)

  • Your job/industry

Using the Genworth LMI calculator, here’s how much LMI could cost you depending on the property value and the size of your deposit.

Property value

Deposit $

Deposit %

Loan term

Upfront LMI premium

Monthly LMI premium








Up to 30 years














Up to 30 years














Up to 30 years







These estimates are for first home buyers on an owner occupied loan.

How to use our LMI calculator

Prior to applying for a home loan with a lender, it’s a good idea to find out how much LMI could cost you, and the earlier you know this, the more financially prepared you can be for it.

Forward planning will also help you to decide how you will go about paying for LMI, whether you will pay it upfront or in increments as part of your monthly repayments.

Your Mortgage’s LMI calculator can help you understand how much you will need to pay for over a 30-year loan term.

All you need to do is select whether you are a first-time homebuyer and provide the value of the property and the total amount you will need to take out on the home loan.

Here's a sample: Assuming you are a first-home buyer who are planning to buy a $800,000 home and borrow with only a 15% deposit ($120,000), you will need to pay around $8,700 for LMI.

How to avoid LMI

LMI can be a big expense and one most borrowers would prefer to avoid. But without it, a lot of first home buyers would be locked out of the market because of the time it takes to save a 20% deposit.

If you’re not prepared to factor LMI into your overall buying budget, or you’re not in a position to cover its costs but you still want to borrow more than 80% of a property’s purchase price, there are a few ways to get around paying the premium or lessen its cost:

  • Use your profession to your advantage. There are some banks and lenders that have a list of accepted professionals, who they will consider waiving or reducing LMI for. Those employed in the medical, accounting, finance, legal or engineering fields may be able to avoid paying it, or may be able to access a cheaper premium. Regardless of your career, before entering into a home loan contract you need to be confident you are financially equipped to tend to repayments for the entire life of the home loan.

  • First Home Loan Deposit Scheme. Government grants like the First Home Loan Deposit Scheme (FHLDS) allow first home buyers to purchase a property with a deposit as little as 5% and the government will essentially act as guarantor for the remaining amount meaning the buyer doesn’t have to fork out for LMI.

  • Have a guarantor. Another way to get around paying LMI is by having a guarantor. Many lenders will waive LMI if the borrower is backed by a quality guarantor who will accept responsibility for the loan repayments if the borrower is unable to make them.

  • Apply with certain lenders. Some lenders offer discounts or even waive LMI fees for some borrowers. ME Bank has a special 25% LMI discount for first home buyers, while St. George has reduced LMI to just $1 for eligible first home buyers with an LVR of up to 85%.

How to pay LMI?

There are two ways you can pay for LMI. Some lenders will allow you to capitalise LMI onto your loan (add the LMI onto your home loan) so it can be paid gradually over time with your mortgage repayments. However, this means that interest will accrue on the LMI, costing you more over time.

The alternative is to pay LMI as an upfront cost, which is generally preferred by lenders.

Can you get a refund of LMI?

When you buy a new house or refinance to a new lender, it’s highly unlikely you’ll be able to get your LMI refunded. If your LVR is still above 80% when you refinance or buy a new property, you’ll probably have to pay for LMI again.

However, if your loan is terminated early, you may be able to get a partial refund of LMI depending on the lender.

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