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LMI Calculator

Estimate Lenders Mortgage Insurance based on your loan amount and LVR. See how LMI capitalises into your loan.

Updated 2025-26 FYData stays on your deviceATO sourced data

Disclaimer

This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available ATO data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.

Frequently Asked Questions

What is Lenders Mortgage Insurance?
LMI is a one-off insurance premium that protects the lender (not you) if you default on the loan. It's typically required when your loan-to-value ratio (LVR) exceeds 80%. Premiums range from approximately 0.5% to 4.5% of the loan amount depending on your LVR and loan size.
When do I need to pay LMI?
LMI is required when you borrow more than 80% of the property's value. The most common scenarios are first home buyers with deposits of 5-20%, refinancers whose property has dropped in value, and investors borrowing at higher LVRs. Some professions (doctors, lawyers, accountants) can borrow up to 90% LMI-free with select lenders.
Can I avoid paying LMI?
Yes — save a 20%+ deposit, use a guarantor (parents using their property as security), qualify for the First Home Guarantee Scheme (waives LMI up to 95% LVR for eligible buyers), or use a profession-specific LMI waiver. Some lenders also waive LMI for specific industries or high-LVR customers with strong financials.
Is LMI tax deductible?
For investment properties, LMI is tax deductible — but spread over 5 years (or the loan term, whichever is shorter), not in the year you pay it. For owner-occupied properties, LMI is not deductible. Always confirm with your accountant.

What is LMI?

Lenders Mortgage Insurance (LMI) is a one-off insurance premium paid by the borrower that protects the lender against loss if you default on the loan. It's typically required when borrowing more than 80% of the property's value (LVR > 80%).

How this calculator works

This calculator estimates LMI based on your loan amount and Loan-to-Value Ratio (LVR). It applies indicative premium rates published by major Australian LMI providers (Helia, QBE, Arch). Premiums increase steeply with LVR — a loan at 95% LVR can attract premiums up to 4.5% of the loan, vs ~0.5% at 81% LVR. Investor loans typically incur a ~15% loading on top. The calculator also shows the capitalised loan amount (LMI added to your loan principal).

How to Avoid LMI

The simplest way is to save a deposit of 20% or more. Other options include: using a guarantor (parents pledging their property as security), qualifying for the First Home Guarantee Scheme (Federal Government waives LMI up to 95% LVR for eligible first home buyers), profession-based LMI waivers (some lenders offer LMI-free loans up to 90% for doctors, lawyers, accountants and select professions), and family pledge loans where parents contribute equity.

Capitalising LMI Into Your Loan

Most lenders allow LMI to be 'capitalised' — added to your loan principal rather than paid upfront in cash. This pushes your LVR slightly higher (and increases interest paid over the loan life), but means you don't need cash on hand for the premium. On a $30K LMI bill on a $600K loan over 30 years at 6.5%, capitalisation costs an extra ~$38K in interest over the loan term.

Stamp Duty on LMI

LMI premiums attract state stamp duty in most states (~9-10% of the premium). For example, on a $20,000 LMI premium, you'd pay an additional $1,800-$2,000 in stamp duty. ACT charges no stamp duty on LMI. The calculator does not include this — add it separately.

Tax Treatment of LMI

For investment properties, LMI is tax deductible — but spread over 5 years (or the loan term, whichever is shorter), not in the year you pay it. For owner-occupied properties, LMI is not tax deductible. Always confirm with your accountant.

Approximate LMI Premium Rates (% of loan)

80.01-85% LVR, $300K loan~0.48%
80.01-85% LVR, $500K loan~0.72%
80.01-85% LVR, $750K loan~0.92%
85.01-90% LVR, $500K loan~1.62%
85.01-90% LVR, $750K loan~1.94%
90.01-95% LVR, $500K loan~3.30%
90.01-95% LVR, $750K loan~3.90%
Above 95% LVRGenerally not eligible

Indicative rates only. Actual LMI quote depends on your lender (Helia, QBE, Arch), credit profile, property type, and loan structure. Investor loans typically attract ~15% loading.

Worked Examples

First home buyer: $750,000 property with 10% deposit ($75K)

Loan: $675,000 at 90% LVR. Estimated LMI: ~$13,090 (1.94% of loan)

  1. Property value: $750,000
  2. Deposit (10%): $75,000
  3. Loan amount: $675,000 → LVR = 90%
  4. LMI rate at 90% LVR for $675K loan: ~1.94%
  5. LMI premium: $675,000 × 1.94% = $13,090
  6. Capitalised loan: $688,090 (new LVR ~91.7%)

Investor: $1,000,000 property with 15% deposit ($150K)

Loan: $850,000 at 85% LVR. Estimated LMI: ~$10,565 (1.10% × 1.15 investor loading)

  1. Property value: $1,000,000
  2. Deposit (15%): $150,000
  3. Loan amount: $850,000 → LVR = 85%
  4. Base LMI rate at 85% LVR for $850K loan: ~1.10%
  5. Investor loading: ×1.15
  6. LMI premium: $850,000 × 1.10% × 1.15 ≈ $10,752

Updated for the 2025-26 financial year (1 July 2025 to 30 June 2026).

All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.

Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.

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