Lenders Mortgage Insurance (LMI) is paid on all home loans by the lender to a third party or in-house insurance organisation. It is charged to you if the loan amount is 80% or more of the lender’s valuation of the property you are purchasing.
You can avoid paying LMI by contributing at least 20% of the property valuation. To do this, you may need to seek funds from other sources:
- another home loan secured by another property;
- selling assets;
Sometime lenders will allow the LMI to be capitalised, which means it’s added onto the loan amount.
LMI is expensive but can be worthwhile – it’s the only way you can buy a property if you haven’t saved up a 20% deposit.
uno’s mortgage advisers can step you through LMI calculations, including LMI optimisation strategies. Contact us on 133 866 or via online chat.
This information in this article is general only and does not take into account your individual circumstances. It should not be relied upon to make any financial decisions. uno can’t make a recommendation until we complete an assessment of your requirements and objectives and your financial position. Interest rates, and other product information included in this article, are subject to change at any time at the complete discretion of each lender.