Lenders Mortgage Insurance (LMI) can add tens of thousands of dollars to the cost of buying a home, yet most calculators only show you the premium figure without telling you the full story. Our free LMI calculator estimates your LMI cost based on your property price, deposit, and loan purpose, shows the true cost when LMI is added to your loan (including the interest you pay on the premium over the loan term), and calculates exactly how much extra deposit you would need to reduce or eliminate the cost entirely.
Not sure whether LMI applies to your situation? Book a free assessment with Stanford Financial, our brokers can confirm your position across 50+ lenders and identify whether an LMI waiver or the First Home Guarantee applies to you.
Estimate your Lenders Mortgage Insurance cost — and find out how much extra deposit you'd need to avoid it entirely.
There may be ways to avoid LMI entirely. Some professions qualify for LMI waivers. The First Home Guarantee eliminates LMI with a 5% deposit. Our brokers know which lenders offer the best outcome for your situation.
Book a Free AssessmentLenders Mortgage Insurance (LMI) is a one-off insurance premium charged by lenders when you borrow more than 80% of a property’s value — that is, when your deposit is less than 20%. It protects the lender, not you, against the risk of financial loss if you default on your home loan and the property sells for less than the outstanding balance.
Despite being for the lender’s benefit, the cost is passed directly to the borrower. LMI is one of the most significant upfront costs in a home purchase for buyers with smaller deposits, and it is frequently misunderstood because it offers the borrower no direct protection. If you default and the lender sells the property at a loss, the LMI insurer reimburses the lender and may then pursue you for the shortfall.
LMI is not the same as mortgage protection insurance, which covers borrowers for repayments in the event of illness, injury, or unemployment. LMI only protects the lender.
LMI is calculated as a percentage of the loan amount, with the rate determined primarily by your Loan to Value Ratio (LVR). The higher your LVR, the higher the LMI rate. The rate also increases with the loan amount, meaning a large loan at the same LVR costs more in LMI than a smaller one.
In Australia, LMI is provided by two main insurers: Helia (formerly Genworth) and QBE. Borrowers cannot choose their insurer — lenders have existing arrangements with one or both. The LMI premium figure includes GST (10%, less a small Reduced Input Tax Credit offset) and state stamp duty on the premium (9% in Queensland). The calculator above includes both of these in its estimate.
Most borrowers choose to capitalise LMI into their loan rather than paying it as a lump sum at settlement. While this avoids a large upfront cash outlay, it has a significant hidden cost — you pay interest on the LMI premium for the entire loan term.
A capitalised LMI premium of $16,800 at 6.5% over 30 years accrues approximately $21,400 in additional interest. The true cost of that LMI becomes nearly $38,000 — more than double the original figure. The calculator above shows this true cost for any scenario you enter.
LMI costs vary significantly by LVR band and loan amount. The jump between bands particularly from 90% to 95% LVR is steep. The table below shows indicative LMI premiums for a range of common QLD purchase scenarios at owner-occupied rates, including GST and QLD stamp duty on the premium.
| Property Price | Deposit | LVR | LMI Premium (approx) | True Cost if Capitalised* |
| $500,000 | $75,000 (15%) | 85% | ~$5,700 | ~$14,500 |
| $500,000 | $50,000 (10%) | 90% | ~$9,200 | ~$23,400 |
| $500,000 | $25,000 (5%) | 95% | ~$19,500 | ~$49,600 |
| $700,000 | $140,000 (20%) | 80% | $0 | $0 |
| $700,000 | $105,000 (15%) | 85% | ~$8,000 | ~$20,300 |
| $700,000 | $70,000 (10%) | 90% | ~$12,900 | ~$32,800 |
| $700,000 | $35,000 (5%) | 95% | ~$27,200 | ~$69,200 |
| $900,000 | $180,000 (20%) | 80% | $0 | $0 |
| $900,000 | $90,000 (10%) | 90% | ~$16,600 | ~$42,200 |
| $900,000 | $45,000 (5%) | 95% | ~$35,000 | ~$89,000 |
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* True cost if capitalised assumes 6.5% p.a. interest over 30 years. Figures are indicative only based on typical Helia/QBE rates for owner-occupied loans in QLD. Actual costs vary by lender and insurer. Investment property LMI is typically 10–20% higher.
LMI is not unavoidable. There are several legitimate pathways to either eliminate it entirely or reduce the cost by moving to a lower LVR band.
The most straightforward way to avoid LMI is to save a deposit of 20% or more, keeping your LVR at 80% or below. On a $700,000 property, that means a $140,000 deposit. This requires time but eliminates LMI entirely and often results in a better interest rate. Our borrowing power calculator can help you model your position at different deposit levels.
Eligible first home buyers can purchase with just a 5% deposit and pay no LMI through the First Home Guarantee. The federal government guarantees the remaining 15% of the standard 20% threshold, so the lender treats the loan as if it has an 80% LVR. As of October 2025, the scheme has no income caps, no limit on places, and raised price caps (—1M in Brisbane, Gold Coast and Sunshine Coast, $700K for the rest of QLD). This is one of the most significant LMI avoidance strategies available to eligible buyers. See our first home loans page for full eligibility details.
Many lenders offer LMI waivers for borrowers in specific professions considered low risk. Eligible professions typically include medical professionals, dentists, lawyers, accountants, and certain other high-income occupations. LMI waivers allow borrowers to purchase with as little as 10% deposit (sometimes 5%) without paying LMI. Stanford Financial has access to lenders who offer these products across a range of professions:
A family member (typically a parent) can use equity in their own property to guarantee part of your loan. This effectively reduces your LVR below 80% without requiring a larger cash deposit, avoiding LMI entirely. Our low deposit home loans page covers how guarantor structures work and what it means for the guarantor.
Even if you cannot reach 20% deposit, saving a smaller additional amount to move from a higher LVR band (such as 95%) to a lower one (such as 90%) can save thousands in LMI. The calculator above shows the exact extra deposit needed to move between bands and the savings at each level.
Whether LMI is ‘worth it’ depends on the relationship between your LMI cost, the property market, and your savings rate. In a rising market, the opportunity cost of waiting to save a larger deposit can exceed the LMI cost significantly.
A Queensland property valued at $700,000 growing at 5% per annum increases in value by $35,000 in the first year. If it takes you 18 months to save an additional $35,000 deposit to avoid $12,900 in LMI, you may have been better off buying sooner and paying the LMI — even accounting for the true capitalised cost. Every situation is different, which is why a broker assessment is valuable before making this decision.
There is no universal answer. The right decision depends on your specific numbers, your savings rate, the market you are buying in, and how long you can realistically wait. A Stanford Financial broker can model this comparison for your actual situation as part of a free assessment.
The borrower pays LMI even though it protects the lender. The premium is either paid as a lump sum at settlement or added (capitalised) to the loan balance. Most borrowers choose to capitalise it to avoid a large upfront cash outlay, but this means paying interest on the premium for the loan term, significantly increasing the true cost.
Yes. LMI is a one-off premium calculated at the time of loan approval. It is not an ongoing monthly fee. However, if you refinance to a new lender while your LVR is still above 80%, you may be required to pay LMI again on the new loan. LMI policies are not transferable between lenders. This is one of the reasons why refinancing requires careful cost analysis, particularly in the early years of a loan.
LMI in Queensland includes the base premium, GST (less a small RITC offset), and 9% Queensland stamp duty on the premium. As a rough guide, LMI on a $700,000 purchase with a 10% deposit (90% LVR) is approximately $12,900 for an owner-occupied loan. With a 5% deposit (95% LVR) on the same property, LMI rises to approximately $27,200. Use the calculator above for any specific scenario.
Yes, in some circumstances. First home buyers using the First Home Guarantee can purchase with a 5% deposit and pay no LMI. Borrowers in eligible professions (doctors, dentists, lawyers, accountants, and others) may qualify for LMI waivers at 90% LVR or higher through select lenders. Outside these pathways, a 10% deposit will generally attract LMI. A Stanford Financial broker can assess whether a waiver applies to your situation.
For investment properties, LMI is treated as a borrowing expense and is generally tax deductible over five years or the loan term (whichever is shorter). For owner-occupied properties, LMI is not tax deductible. Always confirm your specific position with a qualified accountant as tax treatment depends on your individual circumstances.
LMI is not refundable or transferable. If you sell the property or refinance to a different lender, the LMI premium is not returned to you. If you refinance to a new lender while your LVR remains above 80%, you will be assessed for LMI again on the new loan. If you refinance with the same lender, LMI typically does not need to be paid again if the loan amount does not increase.
No. LMI protects the lender only. If you default and the property sells for less than the outstanding loan balance, the LMI insurer reimburses the lender for the shortfall. The insurer may then pursue you for the amount they paid out. For borrower protection, a separate mortgage protection insurance product is required as this covers your repayments in the event of illness, injury, or unemployment.
Whether you qualify for the First Home Guarantee, a specialist profession LMI waiver, or a guarantor arrangement — the answer depends on your specific income, deposit, profession, and property. Our brokers assess your position across 50+ lenders at no cost to you.
Ready to find out if LMI applies to your situation or how to avoid it? Book your free assessment today — call us on 0483 980 002 or contact us online.
