Lenders’ mortgage insurance

Lenders’ mortgage insurance

Lenders mortgage insurance (LMI) is a common type of insurance used by individuals who don’t have a large enough deposit to buy a house but would still like to enter the property market.

LMI is a type of insurance that protects lenders (or credit providers) in the event of a borrower defaulting on their home loan.

LMI is often charged as a one-off cost that is added to a person’s home loan if they borrow more than 80 per cent of the property value from the bank.

The cost of LMI can vary according to the total amount of the loan and the percentage of the property. When calculating the LMI amount, lenders take several factors into account, such as:

  • Whether the individual has a stable job and therefore income
  • Whether they have provided a reliable deposit
  • Whether or not the property is occupied

LMI is not the same as mortgage protection insurance. Mortgage protection insurance ensures that a person’s mortgage repayments are covered in the event of the borrower falling ill, being made redundant or passing away.


If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.

Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.

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