What is Lenders Mortgage Insurance (LMI) ?
Lenders Mortgage Insurance (LMI) is insurance that protects the lender, not the borrower if the borrower is unable to meet their loan repayments and the lender suffers a financial loss after an enforced sale of the property.
Although the LMI protects the lender, indirectly there are benefits to the borrower as well.
Having insurance cover lowers the inherent risk for a lender; as a result the lender is able to lend higher loan amounts or accept loans from borrowers with lower deposits.
If your LVR is greater than 80% (i.e. you have less than 20% deposit), you may be required to pay LMI.
Lenders Mortgage Insurance (LMI) is insurance that protects the lender, not the borrower if the borrower is unable to meet their loan repayments and the lender suffers a financial loss after an enforced sale of the property.
Although the LMI protects the lender, indirectly there are benefits to the borrower as well.
Having insurance cover lowers the inherent risk for a lender; as a result the lender is able to lend higher loan amounts or accept loans from borrowers with lower deposits.
If your LVR is greater than 80% (i.e. you have less than 20% deposit), you may be required to pay LMI.