Understanding Lenders Mortgage Insurance (LMI)

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Lenders Mortgage Insurance (LMI) is often misunderstood, but with the right advice, it doesn’t have to be complicated. 

LMI protects the lender, not the borrower, when you have a smaller deposit. While it adds a cost to your loan, there are also strategies to minimise or even avoid paying LMI, depending on your situation. 

Coach Brokerage helps you understand when LMI applies, what it means for your loan, and how to structure your lending to achieve the best outcome. 

✅ When borrowing more than 80% of a property’s value (loan-to-value ratio above 80%)
✅ When purchasing with a smaller deposit
✅ For first home buyers or buyers re-entering the market (unless we have access to certain Government Grants)
✅ Some investment property purchases with higher loan amounts
✅ In certain refinance or debt consolidation scenarios 

While LMI adds a cost, it can also serve as a useful tool to help you enter the market sooner. Talk to us to find out how.

We provide full LMI premium estimates as part of your loan strategy, so you know exactly what to expect. LMI is:

✅ Based on your loan amount and loan-to-value ratio (LVR)
✅ The higher your LVR, the higher the LMI premium
✅ Property type and location may also impact the premium
✅ LMI can often be capitalised (added to your loan) or paid upfront
✅ Every lender calculates LMI premiums slightly differently 

The right strategy can save thousands in unnecessary LMI costs or help you enter the market sooner with confidence. 

Coach Brokerage will:

✅ Explore deposit options to reduce or avoid LMI where possible
✅ Access lenders with reduced LMI policies for certain professionals
✅ Utilise government schemes that allow lower deposits without LMI (e.g. First Home Guarantee)
✅ Negotiate lender policy differences to minimise LMI premiums
✅ Fully explain your LMI options upfront before proceeding 

Does LMI protect me?
No - LMI protects the lender if you default. You still remain fully responsible for your loan repayments.

Can LMI be waived?
In some cases, yes, for certain professions, government schemes, or lower-risk borrowers.

Is LMI refundable?
Generally no, but partial refunds may apply if the loan is paid out very early (depending on lender policy).

Can LMI be added to my loan?
Yes - many lenders allow LMI to be capitalised and included in your total loan amount.

Lenders Mortgage Insurance doesn’t need to be confusing or costly.

Book your obligation-free consultation today and let Coach Brokerage structure your loan to manage or minimise LMI wherever possible.

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