🇦🇺 LMI — Lenders Mortgage Insurance 2026
What LMI costs at each LVR, worked examples, and every strategy to avoid or reduce it — including the First Home Guarantee and professional exemptions.
Check your Australian borrowing power and LMI threshold:
Borrowing Power Calculator →What Is LMI?
Lenders Mortgage Insurance (LMI) is an insurance premium paid by the borrower to protect the lender if the borrower defaults and the property is sold for less than the outstanding loan. It is required when your deposit is less than 20% of the property's value (LVR above 80%).
LMI Premium Rates by LVR (2026)
LMI premiums are calculated as a percentage of the loan amount (not the property value) and vary by lender, loan size and LVR:
| LVR | Deposit | LMI Premium (approx.) | On $500k Loan |
|---|---|---|---|
| ≤80% | 20%+ | No LMI | $0 |
| 80.01–85% | 15–19.99% | ~0.46–0.70% | ~$2,300–$3,500 |
| 85.01–90% | 10–14.99% | ~0.94–1.60% | ~$4,700–$8,000 |
| 90.01–92% | 8–9.99% | ~1.87–2.50% | ~$9,350–$12,500 |
| 92.01–95% | 5–7.99% | ~2.50–3.44% | ~$12,500–$17,200 |
Premiums are indicative and vary between Genworth (now Helia) and QBE — the two main LMI providers in Australia. Stamp duty on LMI may also apply in some states.
LMI Worked Example
Scenario: A$600,000 property, 10% deposit (90% LVR)
- Property value: A$600,000
- Deposit (10%): A$60,000
- Loan amount: A$540,000
- LVR: 90%
- LMI premium (~1.60% of loan): A$8,640
- If capitalised into loan: new balance = A$548,640
- Extra monthly interest (at 6%): ~$43/month
Vs. saving to 20% deposit (A$120,000): no LMI + lower rate = potentially worth waiting
How to Avoid LMI
The straightforward route. On a $600k property this means $120k — a significant saving that also unlocks better interest rates.
The government guarantees 15% of the loan for eligible first-home buyers, allowing a 5% deposit with NO LMI. 35,000 places per year. Property price and income caps apply by state/territory.
A family member (usually a parent) uses equity in their own property as security, reducing your effective LVR below 80%. Substantial risk for the guarantor — seek independent legal advice.
Many lenders waive LMI for eligible professionals borrowing up to 90–95% LVR: doctors, dentists, vets, lawyers, accountants, pharmacists. Requirements vary — shop around via a broker.
LMI vs CMHC (Canada) — Key Differences
| Feature | Australia LMI | Canada CMHC |
|---|---|---|
| Trigger LVR | >80% | >80% (min 5% deposit) |
| Who provides it | Private (Helia, QBE) | Government (CMHC) + private |
| Protects | Lender only | Lender only |
| Cost at 90% LVR | ~1–1.6% of loan | 3.10% of loan |
| Can be capitalised | Yes | Yes |
| Government scheme to avoid | First Home Guarantee | None equivalent |
FAQs
⚠️ LMI premiums vary by lender and are indicative only. Verify with your lender or a mortgage broker. Not financial advice. Sources: Helia (formerly Genworth), QBE LMI, NHFIC (2025).