Lenders Mortgage Insurance
With rising rent prices making it difficult for borrowers to save a good home loan deposit Lenders Mortgage Insurance (LMI) has helped thousands of home buyers with low deposits enter the property market.
If you are a owner-occupier you will ideally require a minimum 5-10% deposit of the purchase price. With the help of Lenders Mortgage Insurance lenders are willing to consider low deposit loan applications and will charge an LMI premium to protect them in the event a default is made on the loan.
The LMI premium is calculated based on:
- How much you want to borrow
- The Loan-to-Value Ratio (LVR)
- The LMI product type (e.g. first home buyer, non-genuine savings, low-doc loan)
Lenders Mortgage Insurance is calculated on a sliding scale of percentages of your loan amount. The percentage LMI applicable to you is based on your LVR, how much you need to borrow and the loan type you apply for.
Your LMI premium will also vary between lenders as each bank and lender will have their own assessment criteria, so a mortgage broker is best placed to help you compare LMI products to find the one that caters to your financial situation.
Now Find Out Your LMI Premium
What Are the Requirements for LMI?
As an example, some of the eligibility requirements for LMI are as follows:
- You must generally be a permanent Australia resident or citizen
- Good credit history
- You must be in your current permanent role at work for 12 months or have worked continuously in the same industry or role for over 2 years
The larger you can make your home loan deposit the better, as it reduces your LMI premiums. Some lenders will allow you to borrow the LMI premium also known as capitalising your premium on top of your loan amount.
You should always discuss your specific situation with your mortgage broker.
More information and home loan help
For more information on how and where to find a better home loan deal from an extensive panel of Australian banks and secure mortgage lenders, or to speak to your local mortgage broker, contact us on 13 94 62 (direct +61 2 9249 3739)
