What You Need to Know About LMI:
Saving a big deposit can be tough—especially when rent keeps rising. That’s where Lender’s Mortgage Insurance (LMI) can help. It allows buyers, particularly first-timers, to get into the market sooner with a smaller deposit—sometimes as little as 5%.
But here’s the catch: LMI doesn’t protect you. It protects the lender in case you can’t repay the loan and the property needs to be sold at a loss.
The less you put down upfront, the more LMI is likely to cost. Generally, it kicks in when your deposit is under 20% of the property’s value. And depending on what kind of property you’re buying—like a small city apartment or rural block—it may still apply even with a solid deposit.
The good news? You usually don’t have to pay it all at once. Many lenders let you add it to your home loan and pay it off over time.
LMI isn’t right for everyone, but it can be a valuable tool for getting out of the rental cycle and into your own home. Your mortgage broker can help you understand how it might fit your situation.
Call Jason Brown at Home Loans Australia today to discuss your situation: https://homeloansoz.com.au/apply-now/
