LMI is a one-off insurance premium that protects the lender (not you) if you default on your home loan. It's required when your deposit is less than 20% of the property value (i.e., your Loan-to-Value Ratio exceeds 80%). LMI is typically added to your loan amount.

LMI costs increase steeply as your LVR rises. At 85% LVR, it might be $3,000–$5,000. At 90% LVR, $8,000–$15,000. At 95% LVR, $15,000–$30,000+. The cost also increases with the property price and loan amount.

You can avoid LMI entirely by saving a 20% deposit, or through the Home Guarantee Scheme which allows 5% deposits without LMI for eligible first home buyers. Use our First Home Buyer Calculator to check eligibility.