Lenders Mortgage Insurance (LMI) exists to protect the lender if a borrower is unable to meet the repayments of their loan and if the property needs to be sold.

If the property is sold, but the proceeds from the sale do not cover the full balance of the loan and additional costs incurred, the lender is able to claim any shortfalls in accordance with the terms of the insurance policy.

Does everyone pay LMI?

Generally, only borrowers with less than 20% deposit of the purchase price are required to pay LMI as they are considered a ‘high risk’ borrower.

How do I avoid LMI?

Saving a bigger deposit will allow you to bypass Lenders Mortgage Insurance, but of course, there are times when that not an option.

To find out more about Lenders Mortgage Insurance get in touch with our expert team who can make a quick assessment for you. Call 1300 790 773.