LMI Calculator

How the LMI Estimate Works

Lenders mortgage insurance (LMI) depends on the loan amount and the share of the property's value you borrow. That share is the loan-to-value ratio (LVR). LMI protects the lender if a borrower defaults and the property sale leaves a shortfall.

This calculator builds a planning range from Helia's public estimator. It uses observed GST-inclusive premiums for $500,000 and $1,000,000 properties at 80.01%, 82%, 85%, 90% and 95% LVR. The examples distinguish first-home status and property use. Loan terms fall into groups of up to 30, 35 or 40 years.

For each matching group, the model divides each premium by its loan amount. It applies the lowest and highest observed rates at the surrounding LVR points to your loan. At an exact LVR point, it uses that point's two property-value examples.

The range shows the spread in those examples, not a guaranteed minimum and maximum quote. The insurer's application premium also depends on the borrower, security and loan purpose. Your quote or Your rates replaces the model when you have a more suitable premium assumption.

For property values outside the example range, loans above 95% LVR or refinancing, use one of those entered-premium options. A first-home selection changes the examples used, but does not establish eligibility for a discount or waiver.

For refinancing, enter existing equity in place of the purchase deposit. Equity reduces the starting loan and is excluded from the cash required.

Paying LMI Upfront or Adding It to the Loan

Paying LMI upfront adds the premium to the cash you need. Adding it to the loan preserves that cash and increases the loan balance. The larger balance attracts interest and can exceed a lender's maximum LVR.

The starting example uses an $800,000 property, an $80,000 deposit and a $720,000 loan before LMI. It assumes a non-first-home buyer living in the property, a 30-year term and New South Wales insurance duty treatment. The model's range is $13,150 to $16,706, with the upper figure used for the comparison.

The deposit towards the property stays $80,000 in both cases. Paying the premium in cash raises the cash required before other costs to $96,706. Enter transfer duty and legal costs separately to include them in both cash totals.

The comparison adds the same premium and duty to the base loan. It does not recalculate the insurer's premium using the higher balance. A lender can require more cash if capitalising the premium breaches its lending limit.

LMI Calculators by Lender and State

A generic LMI calculator cannot reproduce a bank's insurer agreement or lending policy. A lender can use different pricing, a different insurer or its own risk fee. Use a written premium quote when comparing actual loan offers.

State insurance duty changes the total premium. New South Wales exempts qualifying LMI premiums, while the Australian Capital Territory has abolished insurance duty. Queensland applies 9%, Victoria and Western Australia use 10%, and South Australia uses 11%.

The model also uses 10% for Tasmania and the Northern Territory. Tasmania's separate 2% mortgage-insurance rate concerns borrower life insurance under its Duties Act, which differs from LMI. The duty override lets you apply a different treatment from a specific quote.

These are insurance duties on the premium, separate from property transfer duty. A $10,000 GST-inclusive premium attracts $900 of Queensland insurance duty, bringing the total to $10,900. If your quote already includes duty, select Includes duty to keep the total unchanged.

The official rules are published by Revenue NSW, the Queensland Revenue Office, Victoria's State Revenue Office and RevenueWA. Other rules appear at RevenueSA, in Tasmania's Duties Act, at the ACT Revenue Office and on the Northern Territory's duty page.

Reducing the Amount of LMI

A higher deposit reduces the base loan and its LVR. A lender-approved waiver or an eligible government guarantee can remove the borrower-paid premium. Each route has its own eligibility rules.

In the starting example, another $80,000 towards the deposit reduces the loan to $640,000 and the LVR to 80%. The model assumes no borrower-paid LMI at that level. Purchase costs still need funding, and a lender's own insurance requirements can differ.

To compare a confirmed waiver, choose Your quote and enter a zero premium. The resulting loan stays $720,000 at 90% LVR, with $80,000 cash needed before other costs. First-home status alone does not justify that zero.

Compare the cash needed under each eligible route with the larger loan and interest that follow capitalisation. Use the lender's accepted valuation and premium when preparing the final purchase figures.