Arch LMI Policy for Mortgage Brokers 2026

Arch lenders mortgage insurance (LMI) covers a lender’s mortgage risk through that lender’s insurance arrangements. For a broker, the assessment starts with the lender’s applicable policy, the borrower’s evidence and the security. Lender credit approval and the insurance decision remain separate parts of the file.

An Arch-backed loan needs more than an insurer name on a product sheet. The loan amount, property and borrower facts must match the assessment policy. Retain the premium calculation and referral conditions when comparing LMI policy pathways.

Confirm Arch Policy Ownership

Arch LMI Australia uses Arch Lenders Mortgage Indemnity Limited as its licensed mortgage insurer, according to its Australian website as at October 2026. Arch LMI Pty Ltd is the service company for that insurer. Use the legal entity on the loan’s insurance documentation when recording the insurer.

The lender determines which insurance arrangement applies to its loan. Commonwealth Bank’s CommBroker LMI page names Arch as its preferred mortgage insurer, as at October 2026. That relationship establishes a lender pathway, not eligibility for every Commonwealth Bank scenario.

Record the lender, product and applicable Australian policy version before testing a scenario. Keep its effective date and any later bulletin that changes the relevant rule. Arch’s United States underwriting manuals govern a different market and cannot supply Australian borrower or security limits.

Keep Two Decisions in the File

The lender assesses whether it will make the loan. The insurer assesses the risk it will cover under its arrangement with the lender. A favourable result in one assessment doesn’t establish the other result.

Arch’s Credit Reporting Policy, revised 18 December 2023, explains that lenders provide borrower credit information when applying for insurance. Arch uses that information to assess insurance risk and can obtain information directly from a credit reporting body. Send the loan’s insurance questions through the lender’s assessment route, with the scenario and policy reference attached.

Test Borrower and Loan Fit

Test borrower fit against the policy for the selected lender and insurance arrangement, using the facts the application will actually contain. Residency, income and purpose need their own evidence. A maximum lending ratio alone cannot establish that the borrower qualifies.

Use a scenario record with enough detail to distinguish the policy questions.

Scenario fact	Evidence or detail to record	Assessment question
Borrower and residency	Applicant names, citizenship or visa status and place of residence	Does this borrower category fit the applicable insured-loan policy?
Employment	Employer, role, employment basis and start date	Does the employment history meet the rule for that income type?
Income	Payslips or business income evidence, with any variable or foreign income identified	Which income amounts can count and which need further evidence?
Credit position	Declared debts and repayments, with explanations for adverse credit	Does the proposed insured loan need an individual referral?
Loan purpose	Purchase, refinance or another purpose, including any additional borrowing	Does the insured arrangement accept each requested purpose?
Loan structure	Applicants, guarantors, repayment type and proposed term	Does the structure fit the lender’s insurance policy?

This is a preparation checklist, not an Arch minimum-document schedule. Attach the documents required by the applicable lender policy and any specific insurer request. Record accepted income separately from the client’s gross income so the referral doesn’t overstate repayment capacity.

When a fact needs an individual decision, ask a question that the assessor can answer against the scenario. For example, describe the borrower’s actual visa status, employment history and proposed loan structure together. Retain the written response and its conditions with the application.

Profession concessions need a separate eligibility assessment. The LMI waiver guide explains that route without treating occupation alone as an Arch approval.

Check Property, LVR and Evidence

Calculate the loan-to-value ratio (LVR) using the proposed debt and the property value accepted for assessment. Keep the property description and valuation with that calculation. A change to either input can change the insurance referral.

As at October 2026, Commonwealth Bank directs brokers to Security Lending Margins and its Postcode Lookup Tool for the applicable limits and LMI policy. Use those lender-specific results for a Commonwealth Bank file. Carry the property type, address and postcode into the referral so the assessor can match the security to the rule.

The Australian Prudential Regulation Authority (APRA) includes a capitalised mortgage insurance premium in LVR under its insurer capital standard, effective 1 July 2023. That capital calculation doesn’t establish a lender’s maximum LVR. Record the base loan and financed premium separately, then apply the lender’s assessment basis.

Worked Example: A Lower Valuation

In this hypothetical referral, a client requests a $540,000 base loan against a property expected to be worth $600,000. Before any financed premium, the LVR is 90%. The accepted valuation comes back at $580,000, which raises that ratio to about 93.1%.

The lower valuation changes the security calculation even though the borrower’s income remains the same. Update the referral with the lower value and revised LVR. Recalculate any financed premium and ask for assessment of the revised loan amount before relying on the earlier decision.

These figures illustrate arithmetic, not an Arch lending limit or approval. If the accepted valuation identifies a security category outside the applicable policy, refer that specific issue for a decision. A lower LVR doesn’t itself make an excluded security acceptable.

Keep the valuation date, property type and any valuation qualifications in the file. An address-only referral misses issues that the valuation identifies, such as a different use or construction status.

Explain Premium and Decision Conditions

Obtain the premium for the actual lender scenario and retain the inputs that produced it. Commonwealth Bank links an official premium calculator from CommBroker, as at October 2026. Use the lender’s current calculation and assessed amount when explaining the cost to your client.

Arch describes single and staged premiums, as at October 2026. A single premium is paid at settlement and can be capitalised. A staged arrangement spreads the premium over a term, but the loan’s lender arrangement determines what is available to the client.

Show the quoted amount with the loan amount, accepted value and purpose used in the calculation. Record whether the borrower pays it upfront or finances it. Preserve any tax or duty treatment shown in the quote and distinguish an estimate from the final assessed amount.

For the broader explanation of coverage and borrower funding choices, use the lenders mortgage insurance guide. Keep this referral focused on the selected insurer arrangement.

Retain the Decision and Its Conditions

Before treating the file as ready, bring the assessment records together.

• Keep the lender’s credit decision and its outstanding conditions.
• Retain the insurer decision or lender confirmation of insurance acceptance for the assessed scenario.
• Save the policy version and effective date used, including any approved exception.
• Attach the premium quote and the documents that support the assessed borrower and security facts.
• List unanswered scenario questions, with the person responsible for resolving each one before submission or acceptance.

Arch’s 2025 LMI fact sheet states that insurance doesn’t transfer to a new lender on refinance. Loan variations can also attract an additional premium. Route a refinance or changed loan back through the relevant lender assessment instead of carrying over the old insurance result.

Use the lender’s broker support route for the loan-specific referral. For an enquiry about Arch’s Australian business, its official contact page lists +61 2 8058 4900, as at October 2026. Submit the final scenario with its conditions resolved or clearly identified for the assessor’s decision.