Lenders Mortgage Insurance (LMI) is a banking insurance policy you will pay to the lender if you intend to borrow more than 80% of the value of your property. It is the insurance banks take out for the mortgage to protect themselves in the event that you fail to repay your loan.
The cost of LMI will depend on your loan to value ('LVR') and the loan type and amount. Generally, the larger the deposit you have, the less your LMI fee will be.
As a purchaser, you may avoid LMI if you qualify for the first home loan deposit scheme or if you retain a guarantor against your loan.
A guarantor guarantees your lease, by promising that if you fall behind on payments, they will also be responsible for the payments
To find out whether you qualify for the first home deposit scheme speak to one of our mortgage brokers here.