Lenders mortgage insurance (LMI) explained

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A guide to lenders mortgage insurance (LMI)

Updated March 08, 2024
Written by James Hurwood
Reviewed by Stephen Zeller

Lenders mortgage insurance (LMI)

Not sure whether you’ll have to pay lenders mortgage insurance (LMI) or not? Selling Houses Australia host, Andrew Winter, has some LMI tips for future homebuyers.
Andrew Winter
Home Loans

Expert tips for LMI

Our General Manager of Money at Compare the Market, Stephen Zeller, wants to make sure Australians understand how LMI works, and how much they might have to pay based on their buying circumstances. With that in mind, he has some tips for homebuyers on the subject of LMI:

Stephen Zeller
General Manager – Money

Look into the FHOG

There are many incentives for first home buyers to enter the market right now. If you’re a first home buyer, you could be saving thousands of dollars by securing a place in the government’s First Home Guarantee scheme with as little as a 5% deposit. It’s worth doing your research.

Single parent? Try the FHG

Another government scheme that’s a little more unknown is the Family Home Guarantee. This is a similar scheme to the First Home Guarantee but is specifically for single parents looking to get into the market with as little as 2% of the purchase price saved as a deposit. Unlike the First Home Scheme, applicants are allowed to have owned property in the past, so this is not exclusively for first home purchases.

We’re here to help!

With so many different schemes, grants and lender offers for first home buyers, it can feel overwhelming as to know where to begin! Our team of Home Loan Specialists are here to help make sense of these and match them to your individual scenario to help you get into the market sooner, and importantly, keep more of your savings in your back pocket.

LMI explained

What is LMI?

How does LMI work?

How much is lenders mortgage insurance?

Factors that may influence the cost of your LMI

Is LMI the same as mortgage protection insurance?

Does LMI have any benefits for the borrower?

LMI vs stamp duty: What’s the difference?

Do I actually need LMI?

Paying LMI

Can I avoid paying LMI?

Can my LMI premiums be refunded?

Will I have to pay LMI if I’m refinancing my home loan?

Can LMI be paid monthly?

Average LMI costs around Australia based on median house prices

Meet our home loans expert, Stephen Zeller

Stephen Zeller
General Manager – Money

Stephen has more than 30 years of experience in the financial services industry and holds a Certificate IV in Finance and Mortgage Broking. He’s also a member of both the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the Mortgage and Finance Association of Australia (MFAA).

Stephen leads our team of Home Loan Specialists, and reviews and contributes to Compare the Market’s banking-relating content to ensure it’s as helpful and empowering as possible for our readers.

¹ CoreLogic Home Value Index, April 2023.