LMI calculator

Use Finder's free LMI calculator to estimate your lenders mortgage insurance premiums.

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Lenders mortgage insurance (LMI) is a premium lenders charge home buyers with low deposits. LMI can add thousands or tens of thousands of dollars to your home-buying costs.

LMI calculator

Enter your borrowing amount and the price of the property you're purchasing below. Enter estimates if you don't have exact figures. This will give you a lenders mortgage insurance estimate.

Property value
$
Borrowing amount
$

How to use the calculator

Here's a simple example showing you how to use the LMI calculator. Let's say you're looking to buy a home and you have a price range of around $650,000 (if you've already found a home to buy you can use the exact figure).

You have a 10% deposit saved, which is $65,000. That means your borrowing amount is $585,000.

Enter $650,000 and $585,000 into the calculator. Your LMI estimate is $12,753.00.

That's a lot of money (and keep in mind it's a broad estimate, not an actual quote). But what if you increased your deposit to 15%? That's $97,500.

Now you enter $650,000 and $552,500 (your adjusted loan amount) into the calculator.

Your lenders mortgage insurance premium is now $6,436.63. That's around half what it was before.

How this LMI calculator works

We benchmarked our calculator against multiple LMI estimates and created a tool that takes into account your property value and your loan to value ratio (LVR). This results in a premium estimate that scales according to the cost of the property relative to your deposit size and loan amount.

With LMI, you pay a higher premium as your property value increases. You also pay more the smaller your deposit is.

You pay more LMI with a 10% deposit on a $1 million home than you would with a 10% deposit on a $500,000 home. And if your deposit was only 5%, you'd pay even more.

Of course, if you have a 20% deposit or higher you won't pay LMI at all.

How to avoid LMI premiums

If the estimates above are a shock to the wallet, don't despair. Many lenders allow you to capitalise your LMI premium. This simply means borrowing the LMI cost and folding it into the home loan.

This will increase your monthly repayments slightly and cost you more in interest over time. But if your priority is getting a home now, it could be worth it.

You can avoid LMI by getting a guarantor home loan. There's also the First Home Loan Deposit Scheme. This federal government scheme allows eligible first home buyers to buy a home with just a 5% deposit while avoiding LMI.

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