LMI Calculator (Lenders Mortgage Insurance)
Get an indicative estimate of lenders mortgage insurance on a deposit under 20%, and see how much more you'd need to avoid it.
Indicative estimate only, based on typical premiums for an owner-occupier with a principal and interest loan. Premiums include stamp duty, which varies by state. Your lender's insurer sets the real price, and it can differ by several thousand dollars.
Printed from ClearCalc (clearcalc.com.au/lmi-calculator/). Estimates only, not financial advice.
What is lenders mortgage insurance?
Lenders mortgage insurance (LMI) protects the lender, not you, if you can't repay your loan and the sale of the home doesn't cover the debt. Most lenders charge it when you borrow more than 80% of the property's value, which is the same as having a deposit under 20%. You pay the premium once, at settlement, and most lenders let you add it to the loan.
How LMI is priced
The premium is a percentage of the loan, and it rises steeply with your loan to value ratio (LVR) and the size of the loan. As a rough guide:
- LVR 80–85%: around 0.5% to 1.0% of the loan.
- LVR 85–90%: around 1.0% to 2.0%.
- LVR 90–95%: around 2.0% to 4.0%, and more for larger loans.
Loans over $500,000, and especially over $1 million, attract higher rates. For example, on a $700,000 home with a 10% deposit, the loan is $630,000 at a 90% LVR, and LMI could be roughly $14,000. Adding it to the loan means you also pay interest on it for the life of the loan.
Ways to avoid or reduce LMI
- Save a 20% deposit. The calculator shows how much more you'd need.
- The 5% Deposit Scheme. The government's Home Guarantee Scheme lets eligible first home buyers buy with as little as 5% deposit and no LMI. Since October 2025 there are no income limits or caps on places, but property price caps apply in each area.
- Professional waivers. Some lenders waive LMI up to 90% LVR for doctors, lawyers, accountants and other professions.
- A family guarantee. A parent can offer equity in their own home as extra security.
- Land value or rent-to-buy deals rarely help. Focus on deposit size and loan size, which drive the premium.
Remember that stamp duty and fees also come out of your savings. Check them with the stamp duty calculator, see how much you can borrow with the borrowing power calculator, and work out repayments with the home loan calculator.
Estimate only. Real premiums depend on the insurer, lender, your state, whether you're buying to live in or invest, and whether you're self-employed.
Frequently asked questions
How much is LMI on a 10% deposit?
As a rough guide, about 1.9% to 2.5% of the loan for most loan sizes. On a $630,000 loan (a $700,000 home with $70,000 deposit) that's roughly $14,000. Your lender can give you an exact quote.
Can I add LMI to my home loan?
Yes, most lenders let you capitalise LMI, so it's added to your loan balance. That avoids paying it upfront, but you'll pay interest on it, and it slightly raises your LVR.
Is LMI refundable if I sell or refinance?
Usually not. Some insurers offer a small partial refund if the loan is paid out in the first year or two, but generally the premium is a one-off cost. If you refinance with an LVR above 80%, you may have to pay LMI again.
Do first home buyers pay LMI?
They do unless they have a 20% deposit or use a scheme. Under the 5% Deposit Scheme (First Home Guarantee), eligible first home buyers can buy with a 5% deposit and no LMI, as long as the price is under the cap for their area.
Official sources used for this calculator include: Moneysmart – Home loans, APRA – Australian Prudential Regulation Authority, Housing Australia – Home Guarantee Scheme. See how we calculate.
Reviewed by the ClearCalc team. Last reviewed October 2026. This calculator gives an estimate for general information only. Check important figures with the relevant government agency or a licensed professional.