Lenders’ Mortgage Insurance (LMI) is insurance that protects the lender if you default on your loan repayments. It is required if you borrow more than 80% of your home’s value. LMI can be avoided in a few ways: by saving for a larger deposit, having someone guarantee your loan, applying for a Keystart loan (available in Western Australia only), or utilising other government incentives.
The actual amount of LMI that you’ll pay depends on the LVR, the lender’s rates, and other factors about the property being purchased. LMI can end up costing several thousand dollars, so if you can avoid it, that’s the best case – instead, spend that money on furnishing your new home.
