LMI calculator — Lender's Mortgage Insurance estimate

Estimate LMI by deposit and LVR, compare buying now with waiting, and understand government guarantees. Illustrative model, not a lender or insurer quote.

How to use this calculator

Enter your property value and deposit amount. The calculator instantly shows your LVR (Loan to Value Ratio), the model premium, before any approved waiver. Use the "Pay now vs wait" section to model whether buying now with LMI or waiting to save a larger deposit makes more financial sense for your situation.

What is LMI and who does it protect?

Lender's Mortgage Insurance is one of the most misunderstood costs in the Australian home buying process. Despite the name, LMI protects the lender — not you. If you default on your loan and the property is sold for less than the outstanding balance, LMI covers the lender's loss. You, as the borrower, may still be pursued for any remaining shortfall even after an LMI claim.

LMI is commonly required above 80% LVR, using the lender’s valuation. Exceptions and additional risk charges depend on the lender and product. Ask for an itemised quote and confirm whether the premium can be paid upfront or added to the loan.

How LMI is calculated in Australia

Calcy uses illustrative premium bands, a model allowance of 10% and rounding to the nearest $100. These are not insurer quotes or verified state insurance-duty rates. Actual premiums, charges, capitalisation limits and waivers depend on the lender and insurer. First-home-buyer status alone does not remove the model premium.

Calcy illustrative owner-occupier base model bands (not insurer rates). The model then adds a 10% allowance and rounds to the nearest $100:

LVR above 80% up to 85%: approximately 0.66% of loan amount
LVR above 85% up to 90%: approximately 1.19% of loan amount
LVR above 90% up to 95%: approximately 1.96% of loan amount
LVR above 95%: approximately 3.10% of loan amount

Obtain a written lender quote. The model allowance is not a claim that every state charges 10% insurance duty.

Should you pay LMI now or wait to save more deposit?

This is the most common dilemma for buyers with deposits under 20%. The answer depends on how quickly property prices are rising in your target area relative to your saving rate.

For illustration only, 5% annual growth compounded over 18 months turns a $700,000 property into about $753,151. This is a scenario, not a forecast. Compare additional rent, interest, ownership costs and your savings rate as well as any LMI premium.

Even in a flat or falling market, rent, saving capacity and financing costs can change the outcome. Use the "Pay now vs wait" comparison above to model your specific situation.

Four ways to avoid LMI in Australia

1. Save a 20% deposit

At 80% LVR or below, the Calcy model estimates no LMI; lender requirements still need confirmation. The trade-off is the time required to save — and whether property prices rise faster than your saving rate during that period.

2. Australian Government 5% Deposit Scheme

The Australian Government 5% Deposit Scheme offers eligible first-home buyers a minimum 5% deposit pathway without LMI. Eligible single parents or legal guardians can use the minimum 2% pathway. Since 1 October 2025 there are no income caps or annual place limits. Property price caps, ownership, occupancy and participating-lender requirements still apply. This calculator does not establish eligibility. Check official scheme eligibility.

3. Guarantor loan

A family guarantee (guarantor loan) allows a family member — typically a parent — to use equity in their own property to guarantee part of your loan. This can effectively provide additional security that may avoid LMI, without changing the loan-to-property-value ratio itself. The guarantor's property is at risk if you default, so this arrangement should be entered carefully with independent legal advice for all parties.

4. Profession-based LMI waiver

Some lenders have occupation-based LMI waivers. Eligible occupations, income requirements, LVR limits and loan caps depend on the product. Ask for the current written criteria; this calculator does not assess occupation-based eligibility.

Build your full upfront cost picture

LMI sits alongside stamp duty, conveyancing, and your deposit as upfront cost. Use these tools together to plan your loan. Read the LMI guide, budget purchase costs with the validated budget workbook, or keep a browser-local Home Plan. For refunds, ASIC Moneysmart explains what to ask your lender.

How much does LMI cost in Australia?

LMI depends on the lender, insurer, loan value and LVR. Calcy provides an indicative model, not an insurer quote. A larger deposit or an eligible waiver may avoid LMI; confirm the actual requirement with your lender.

How to estimate Lender's Mortgage Insurance (LMI)

Enter the property value
Type the purchase price or valuation in Australian dollars.
Enter your deposit
Add the deposit amount you've saved.
Review your LVR
See your loan-to-value ratio and whether LMI is required.
See the LMI estimate
Check the indicative premium and capitalised loan repayment.

Frequently asked questions

Who pays LMI and who does it protect?

The borrower usually pays the premium, but LMI protects the lender if the borrower defaults. The borrower can remain liable for a shortfall. It is different from insurance that protects your income or repayments.

Is LMI always required above 80% LVR?

LMI is commonly required when the loan exceeds 80% of the lender-assessed property value. It is not universal: government guarantees, additional security and lender-specific waivers can change the requirement. Obtain written confirmation from your lender.

How accurate is this LMI calculator?

Can a first home buyer avoid LMI?

Can I get an LMI refund?

A refund is not automatic. Ask your existing lender whether a partial LMI refund is available when switching or repaying early; eligibility depends on the policy and lender. ASIC Moneysmart recommends asking about a refund when switching. A new lender may require a new premium.

Can LMI be added to my loan?

Some lenders allow the premium to be added to the loan, subject to lending limits. Borrowing the premium increases the balance on which interest is charged. Compare a written upfront quote with the capitalised cost using the mortgage calculator.

Data sources

ASIC Moneysmart — LMI and switching loans — reviewed 16 Oct 2026; model bands are not insurer quotes

Australian Government 5% Deposit Scheme — eligibility — reviewed 16 Oct 2026

General information and estimates, not personal financial advice. Check assumptions and official sources before making decisions.