Lenders Mortgage Insurance (LMI) is an insurance that banks and lenders use to protect themselves against not being able to recover the full loan balance, should a borrower become unable to meet their loan repayments.
The Lenders Mortgage Insurance amount is relative to the loan value.
You will typically pay Lenders Mortgage Insurance if you borrow over 80% of your property's purchase price. In some cases, this can also be charged against smaller loan amounts if a borrower is deemed as a higher risk, such as not having the full financials to prove their income and employment history.
The insurance amount is relative to the loan value and can be paid in full upfront, or it can be included into the repayments over the life of the loan, attracting additional interest.