Estimate your Lenders Mortgage Insurance (LMI) premium based on your property value and loan amount.
Indicative LMI rates by LVR band (example)
This calculator estimates the Lenders Mortgage Insurance (LMI) premium you may be required to pay when your home loan has a loan-to-value ratio (LVR) above 80%. LMI is a one-off insurance premium paid by the borrower to protect the lender — not the borrower — against the risk of default when the deposit is less than 20% of the property value. The estimate is based on indicative LMI premium rates by LVR band, as LMI premiums in Australia vary by lender, insurer, loan amount, LVR, and loan type.
LMI premiums are set by the two main LMI providers in Australia (Helia, formerly Genworth, and QBE LMI) and vary according to the LVR band and loan amount. They are not calculated using a simple formula — instead, they are looked up from rate tables by LVR tier and loan size. The premium is expressed as a percentage of the loan amount. Higher LVRs attract higher premium rates because they represent greater risk for the insurer.
LVR formula: LVR = (Loan Amount ÷ Property Value) × 100%.
LMI premium formula: LMI Premium = Loan Amount × LMI Rate (from insurer rate table for the applicable LVR band and loan amount). Stamp duty on the LMI premium may also apply in some states.
Example: A A$650,000 property with a A$585,000 loan: LVR = A$585,000 ÷ A$650,000 = 90%. At a 90% LVR, indicative LMI rates for a loan in this range are approximately 2.1-2.4% of the loan amount — meaning an estimated LMI premium of roughly A$12,285 to A$14,040 (example rates only — actual premiums depend on the lender and LMI insurer). (Note: this is an indicative estimate only.)
Lenders Mortgage Insurance is a significant and often misunderstood cost for Australian homebuyers with deposits below 20%. Despite being paid entirely by the borrower, LMI protects only the lender — if the borrower defaults and the property is sold for less than the outstanding loan, the LMI insurer compensates the lender, and may then pursue the borrower to recover the amount paid. This means LMI does not protect the borrower from any liability in the event of default. In Australia, the LMI market is dominated by two insurers: Helia (formerly Genworth Mortgage Insurance Australia) and QBE LMI, with Helia having a larger market share. The specific insurer used varies by lender. LMI premiums are typically capitalised — added to the loan balance — rather than paid upfront, which means the borrower also pays interest on the LMI premium for the life of the loan. On a 30-year home loan, this interest cost can add several thousand dollars to the effective total cost of the LMI. Some states also charge stamp duty on the LMI premium itself (New South Wales, for example), further increasing the cost. Borrowers can avoid LMI by saving a 20% deposit (LVR ≤ 80%), by using a guarantor (where a parent or family member uses the equity in their own property as additional security, eliminating the LVR concern), or by accessing the federal government\'s First Home Guarantee (which allows eligible first home buyers to purchase with as little as a 5% deposit without paying LMI, with the government guaranteeing up to 15% of the value). A handful of lenders also waive LMI for borrowers in certain professions (medical doctors, lawyers, accountants, engineers) at LVRs up to 90% or even 95%, known as LMI waivers for professionals.
Despite being paid by the borrower, LMI protects only the lender. If the borrower defaults and the property is sold for less than the outstanding loan balance, the LMI insurer pays the difference to the lender. The insurer may then seek to recover this amount from the borrower through subrogation. LMI does not protect the borrower from liability for any shortfall, and it does not protect the borrower's deposit or equity. It is essentially risk insurance that enables lenders to extend credit at higher LVRs than they would otherwise accept, allowing borrowers with smaller deposits to access the market sooner.
LMI generally applies when the LVR (Loan ÷ Property Value) exceeds 80% — that is, when the deposit is less than 20% of the property value. At exactly 80% LVR (20% deposit), most lenders do not require LMI. Above 80% (deposits of 5-19%), LMI applies with premiums increasing as the LVR rises. Some lenders set a lower threshold for certain property types or postcodes (e.g., 70% LVR for high-density apartments in some markets), and others may require LMI even at lower LVRs for non-standard properties.
Yes — there are several ways to avoid LMI without a 20% deposit: (1) The First Home Guarantee allows eligible first home buyers to purchase with as little as a 5% deposit without LMI, with the federal government guaranteeing up to 15% of the property value; (2) A family guarantee (also called a guarantor loan) uses the equity in a parent's property as additional security, reducing the effective LVR without needing a larger cash deposit; (3) Some lenders offer LMI waivers for borrowers in certain professions (doctors, lawyers, accountants, etc.) at LVRs up to 90%; (4) Some lenders offer "LMI-free" products for borrowers meeting specific criteria. A mortgage broker can identify which options you may be eligible for.
LMI may be tax deductible if the loan is used for an investment property — in this case, the LMI premium (whether paid upfront or capitalised) is a borrowing cost deductible over 5 years or the term of the loan (whichever is shorter) under Division 25 of the Income Tax Assessment Act 1997. LMI on a home you live in (owner-occupier) is not tax deductible. Confirm deductibility with a registered tax agent based on your specific circumstances.
LMI is generally not refundable if you refinance or sell the property before the end of the loan term. The premium is paid to the LMI insurer at the time of settlement and covers the insurer's risk for that specific loan with that specific lender. If you refinance to a different lender — even shortly after settlement — the new lender requires a new LMI assessment and you may need to pay LMI again if your LVR with the new lender is still above 80%. This is an important consideration when comparing the cost of refinancing: LMI paid on the original loan is a sunk cost that cannot be recovered.
This calculator provides an indicative estimate only. Actual LMI premiums are set by the LMI insurer (Helia or QBE LMI) and vary based on: the specific LVR band, the loan amount, whether the property is owner-occupied or investment, whether the loan is standard or non-conforming, and the lender's specific arrangement with the insurer. Some states also charge stamp duty on the LMI premium. For an accurate LMI quote, ask your lender for the actual LMI premium applicable to your specific loan — lenders receive a quote from the insurer as part of the loan assessment process.
Disclaimer: The information and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice. LMI premium estimates are indicative only — actual premiums are set by the LMI insurer (Helia or QBE LMI) and vary by lender, LVR, loan amount, loan type, and other factors. This calculator does not account for stamp duty on LMI premiums (which applies in some states), lender-specific variations, or LMI waiver arrangements. Government scheme eligibility (e.g., First Home Guarantee) is subject to income caps, property price caps, and criteria that change over time. Consult a licensed mortgage broker or financial adviser for advice specific to your circumstances.