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.
This information is provided by DPN Pty Ltd ABN: 94 630 700 186 Australian Credit Licence 514759. DPN Finance Pty Ltd is an authorised credit representative 504129 and related entity of DPN. Credit for Dream Big 100% Offset and Work Smart 100% Offset is provided by Adelaide Bank a division of Bendigo and Adelaide Bank Ltd, ABN 11 068 049 178 and Australian Credit Licence 237879. Casa Capace Operations Pty Ltd, NDIS provider number 4050038018 trading as Casa Capace.