What Is LMI and Can I Avoid It?

Q: Who is LMI for — me or the bank?

The bank — protects lender, not you. You pay but no protection.

Q: How much does LMI cost?

$20K-$30K on $1M at 90% LVR. Higher at 95%.

Q: What's the cheapest way to avoid LMI?

1. FHB Guarantee 2. Guarantor 3. 20% deposit.

Q: Do doctors really get LMI waived?

Yes — medical/dental/vet/accounting/legal at 90-95% LVR via professional packages.

Q: Can I capitalise LMI into my loan?

Yes — capitalise into loan. Pay interest over life but easier upfront.

Who this guide is for

Australian buyers learning about LMI and wanting to know if they can avoid the cost.

FHBs with less than 20% deposit
Buyers comparing 20% deposit vs LMI cost
Healthcare/medical professionals exploring waived LMI packages
FHBs eligible for FHB Guarantee

The local picture

LMI is one of the biggest hidden costs of home buying. Many buyers don't realise it's avoidable through several pathways or that medical/dental professionals get it waived.

How Mortgagefy helps locally

Mortgagefy explains LMI clearly and identifies the right pathway to avoid it for your situation.

Free advice.

How it works — 4 simple steps

Free LMI chat

20-minute call about your deposit and target home.

Map LMI options

We outline FHB Guarantee, guarantor, professional package pathways.

Application support

We submit via the chosen pathway.

Settle without LMI

You move in saving $15K-$30K.

Frequently asked questions

Who is LMI for — me or the bank?

The bank — LMI protects the LENDER, not you. You pay it but get no protection. It's essentially insurance against you defaulting.

How much does LMI cost?

On a $1M property at 90% LVR (10% deposit), LMI typically $20K-$30K. At 95% LVR even higher. Cost rises with both LVR and loan amount.

What's the cheapest way to avoid LMI?

FHB Guarantee (5% deposit, no LMI) — cheapest. Guarantor loan (parents) — second. 20% deposit (saving more) — third.

Do doctors really get LMI waived?

Yes — medical, dental, vet, accounting, and legal professionals on high incomes get LMI waived even at 90-95% LVR through professional packages with several major lenders.

Can I capitalise LMI into my loan?

Yes — most lenders allow LMI to be added to loan amount instead of paid upfront. Pay interest on it over loan life but easier upfront.

Find out how to avoid LMI for your purchase

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