What is lender’s mortgage insurance AKA LMI?
Banks typically lend 80 of the value of your desired property. This means that you need to save 20% in savings for the deposit. If you don’t have this on hand, the bank can still lend this to you, but with an additional charge.
This is called Lenders Mortgage Insurance or LMI. What is LMI?
#1 – It’s insurance for the bank, not for you.
#2 – LMI covers the risk that the lender might face later on while the loan is still active.
#3 – It’s a one-off upfront payment and it’s not refundable.
#4 – Some professionals, like lawyers, accountants, and doctors are exempt from paying LMI.