What is Lenders Mortgage Insurance (LMI)?
In the event you are borrowing more than 80% of the value of a property from a bank, you will more than likely have to pay what’s called Lenders Mortgage Insurance (LMI). This LMI is a cost that protects the bank in the event you are unable to pay your mortgage.
LMI is not a premium you have to pay upfront nor pay every year or monthly. The LMI is added on to your mortgage and you will pay it off with the rest of your mortgage over time.
If you don’t have much available for a deposit on a home, paying this LMI may make it possible for you to be considered for a larger loan.