How is Lenders Mortgage Insurance (LMI) calculated?

The amount you pay in LMI can change depending on how much you borrow and how high your loan to value ratio is.

How is LMI calculated?

LMI is calculated as a percentage of the loan amount and your LMI will vary depending on your Loan to Value Ratio (LVR) as well as the amount of money you wish to borrow.

The percentage you’re required to pay increases as the LVR and loan amount increase, and usually goes up in stages.

Lenders Mortgage Insurance costs differ depending on the loan, lender and the LMI provider. The factors that determine the cost of your LMI can also include:

  • Whether your property is owner occupied or not - it is believed that you are less likely to default on a loan if the property is also your residence.
  • If you are self employed or paid as a PAYG employee.
  • Whether or not you have genuine savings.
  • Whether or not you are applying for the First Home Owner Grant (FHOG).

Contact Mortgage Choice today to chat with a home loan expert and find out exactly how much LMI you will need to pay.

Stamp duty and taxes on LMI

Stamp duty and GST are both payable on Lenders Mortgage Insurance and these are generally included in the total quoted price for your LMI. Please note that this stamp duty is different to the stamp duty payable when purchasing a property.

Our expert mortgage brokers will explain and work with you through all of these taxes and fees so you understand how your LMI will impact your home loan.

Talk to us today about your home loan and find out whether you need to pay LMI

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