What is LMI?
LMI (Lenders Mortgage Insurance) is a one-off premium that protects the lender — not you — when you borrow more than 80% of a property's value.
Lenders Mortgage Insurance (LMI) is insurance that protects the lender if you default on your home loan and the sale of the property doesn't cover the outstanding debt. Despite the name, it doesn't protect you — it protects the bank.
It's typically required when your deposit is less than 20% of the property value (LVR above 80%). It can cost anywhere from a few thousand to tens of thousands of dollars, depending on the loan size and LVR.
Key facts
- •Protects the lender, not the borrower
- •Usually required when LVR is above 80%
- •Can be paid upfront or added to the loan (capitalised)
- •Cost depends on loan amount, LVR, and lender — can be $5,000 to $40,000+
- •First Home Guarantee scheme lets eligible buyers avoid LMI with as little as 5% deposit
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LMI CalculatorFrequently asked questions
Can I avoid paying LMI?
Yes — save a 20% deposit, use a family guarantee, or apply for the First Home Guarantee scheme (up to 95% LVR without LMI). Some professions (doctors, lawyers) also qualify for LMI waivers at certain lenders.
Is LMI tax deductible?
For investment properties, yes — you can claim LMI as a borrowing cost, deducted over 5 years or the loan term (whichever is shorter). For your home, no.
General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.