Lenders mortgage insurance (LMI) calculator
Use Finder's free LMI calculator to estimate your lenders mortgage insurance premiums in seconds.
How do you calculate LMI?
Lenders mortgage insurance is calculated based on your loan-to-value ratio (LVR). That is, how much of the value of the property you want to borrow. Calculations can vary between lenders and depend on property prices, but it is generally worked out as a percentage of the amount you want to borrow. As your LVR decreases (and your deposit increases) you will pay less in LMI.
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 an estimate of how much lenders mortgage insurance will cost you.
Note that this calculator provides an estimate only and does not include stamp duty or other costs. You may also have the option to borrow your LMI premium cost along with your loan (more info below).
How to use the calculator
Here's a simple example showing you how to use the lenders mortgage insurance calculator.
- Property value: $650,000
- 10% deposit: $65,000
- Borrowing amount: $585,000
- LMI estimate = $12,753
In this example, you need to enter the property value into the calculator and the borrowing amount (the property price minus your deposit).
Now let's try the calculator again with a 15% deposit. Now your borrowing amount will be smaller and your LMI cost will drop too.
- Property value: $650,000
- 15% deposit: $97,500
- Borrowing amount: $552,500
- LMI estimate = $6,437
And remember: if you have a 20% deposit or higher, you won't pay LMI at all.
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 takes into account the following:
- The cost of the property
- Your deposit size, relative to the overall property cost
- The total loan amount
With LMI, you pay a higher premium as your property value increases. This means the premium on a $1 million property with a 10% deposit will be higher than the premium on a $500,000 property with a 10% deposit.
You also pay a high premium for a smaller deposit.
How to avoid LMI premiums
There are a few ways borrowers can avoid or minimise LMI costs.
Buy with a guarantor
You can avoid LMI by getting a guarantor to back your home loan. This requires a family member who owns a property to support your loan application. You can borrow more than 80% and avoid LMI.
But if you can't repay your loan, your guarantor may have to pay back part of it or sell their property (in a worst-case scenario).
Save a bigger deposit
If you can stretch your savings to bring your deposit up to 20%, you can avoid LMI. Even going from a 5% deposit to a 10% deposit is safer and reduces the LMI premium.
Use a government home buyer scheme
There's also the Regional First Home Buyer Guarantee if you're buying your first home in a regional area.
Your occupation might qualify you for an exemption
Borrowers in several highly paid professions may qualify for an LMI exemption. This may include the following:
It's worth asking your lender if your profession qualifies you for an exemption.
A qualified mortgage broker can also help you navigate the ins and outs of LMI and will know which lenders may let you get a discount. A broker can also negotiate with your lender on your behalf.
Talking to a mortgage broker is free.
🔥 Tip: You can capitalise your LMI premium and pay it off over time
You don't have to pay your LMI upfront. You can also borrow it along with your loan. This way, the big upfront cost is gone and you pay it off each month along with your home loan.
This slightly increases your monthly repayments and costs you more in interest over time, but it can help you get into the property market sooner.
Does LMI change depending on your location?
Yes, the amount of LMI does change depending on your state or territory. The premium itself is the same, but you have to pay stamp duty on the LMI premium.
The calculator above doesn't include stamp duty, so you'll have to add an estimate for duty on top. These are the rates of stamp duty:
- ACT: no stamp duty on the LMI premium
- NSW: 9% of the LMI premium
- NT: 10% of the LMI premium
- QLD: 9% of the LMI premium
- SA: 11% of the LMI premium
- TAS: 10% of the LMI premium
- VIC: 10% of the LMI premium
- WA: 10% of the LMI premium
More home loan calculators
More guides on Finder
Home Loan rate rise calculator
Use our simple rate rise calculator to work out how much extra interest you have to pay when interest rates rise.
Capital gains tax calculator
Estimate your CGT when selling an investment property or other asset with Finder's simple capital gains tax calculator.
Comparison rate calculator
The comparison rate represents the actual cost of a home loan by taking into account its interest rate and any additional fees charged by the lender.
Home equity calculator
Home equity can help you access extra financing from lenders to spend on things like home renovations or investment properties. Find out how you can calculate the equity in your home.
Interest-only Home Loan Calculator
Estimate the cost of your repayments if you only pay the interest portion of your loan with an interest-only mortgage.
Calculate how long will it take to pay off my loan?
Wondering 'how long will it take to pay off my loan?' Use our free calculator to see how long it will take to pay off your mortgage.
Lump sum repayment calculator
Use a lump sum repayment calculator to see how much you can save in interest and fewer mortgage repayments. It's quick, free and easy to use.
Home loan extra repayment calculator
Our extra loan repayment calculator helps you see how you could save big on interest. Free, fast and easy to use - calculate in 1 minute!
Mortgage repayment calculator
Want to know how to calculate monthly repayments on your new mortgage? In five steps our free home loan repayment calculator crunches the numbers for you.
Find the right home loan now
Sign up for our FREE 8-week course to get on the property ladder.