What’s the Deal with Lenders Mortgage Insurance (LMI)?

Especially if you're a hospital worker, carer, or buying a home later in life

Buying a home isn’t just something for twenty-somethings with perfect credit. Many Australians in their 40s, 50s, and 60s are re-entering the market, buying solo after a divorce, or helping their children buy their first home.

One of the most common questions I get from clients, especially those working in health or aged care, is: “What exactly is LMI, and can I avoid it?”

What is Lenders Mortgage Insurance?

Lenders Mortgage Insurance (LMI) is a one-off cost that protects the lender if you’re unable to repay your home loan. It’s generally required if your deposit is less than 20 percent of the property’s value.

While it might seem like just another cost, LMI can actually make it easier for you to buy sooner, rather than waiting years to save up a larger deposit.

How Much Does It Cost?

The cost varies depending on your deposit size and the value of the home. For example, if you’re buying a $700,000 property with a 10 percent deposit, LMI could cost upwards of $15,000.

It’s a significant amount, but in some cases, there are ways to reduce or even avoid paying it.

Can You Avoid LMI?

Yes, and I’ve helped many clients do just that.

Here are a few options that could apply to you:

• Guarantor Loans: If you have a family member willing to support your application by offering part of their property as security, you may not need a 20 percent deposit.
• First Home Guarantee Scheme: This federal government scheme allows eligible buyers to purchase with as little as 5 percent deposit, without needing to pay LMI.
• Improving Your Credit Score: If you’ve had a few financial bumps in the road, there are strategies to repair your credit and qualify for more flexible loan options.
• Divorce Restructures: If you're buying again after a separation, I can help you use your equity more effectively and potentially reduce costs like LMI.

Who I Help

I work with hospital staff, carers, and social support workers across the Central Coast. Whether you’re in Avoca Beach, Empire Bay, or Green Point, I understand the challenges you face — and I’ll walk you through every step.

Let’s Talk Through Your Options

If you've been told you need to pay LMI, let’s review your situation first. There may be a better way forward.

Book your free chat and let’s work out what’s possible.

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