Mortgage Broker Perth
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Lenders Mortgage Insurance Perth

Everyone knows that the more you save as a home deposit the less you will need to borrow, and therefore the less interest you will need to pay on your mortgage. Each lender will vary the size of the deposit needed but usually around 10% of the purchase price is required.  Any less than this and you will have to pay lenders mortgage insurance (LMI).

Lenders mortgage insurance is paid when you take out the loan and it is a one-off fee paid by the borrower to the lender (or lender's insurer) to 'insure' a home loan. LMI insures the lender for any financial losses and problems resulting in your inability to repay the loan.  Borrowers should be aware that lenders mortgage insurance is not proving any protection for them.  Lender's Mortgage Insurance protects the lender, not the borrower.


Do I have to pay LMI?

If you have a no deposit home loan or any type of loan where you are paying less than 20% deposit, there will most likely be a lender's mortgage insurance fee.  The mortgage insurance is arranged by the lender, not the borrower, but the borrower pays for it.

Mortgage Insurance Companies

In Australia, the Lender's Mortgage Insurance market might be changing, but there still remains two dominent LMI providers - Gemworth Financial and PMI.  Most banks & lenders will choose their preferred insurer, meaning you get no say in who it insurance goes through.

Currently there is a trend of more LMI providers entering the market, and some lenders do offer borrowers choice.  You could choose the one that suits you the best, and matches with your personal circumstances, and talking it over with a mortgage broker is a good idea.


How much is the fee?

Mortgage insurance varies but it can be as much as 3% of the amount you are borrowing. If you have a deposit of 20% or more and your application is all in order, mortgage insurance is generally not charged.



If you are concerend about LMI or have any questions regarding your home loan, please call us on or submit your details on line.  We have trained mortgage brokers near by ready to assist you organise all your home loan finances.



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