About the Australia LMI Calculator
This LMI calculator estimates the lenders mortgage insurance an Australian lender will charge when your deposit is less than 20% of the property value — that is, when the loan-to-value ratio (LVR) is above 80%. It shows your LVR, an estimated premium, the total loan if the premium is added (capitalised) to the loan, and the extra interest that capitalising costs over the loan term.
LMI protects the lender, not you, and premiums are set by private insurers. They rise steeply with LVR and are also affected by loan size, the lender, whether you are a first home buyer and state stamp duty on the premium. Because insurers do not publish a single official rate card, the calculator uses indicative mid-market rates for each LVR band; if your lender or broker has quoted a premium rate, switch to a custom rate for an exact figure.
Eligible first home buyers using the Australian Government 5% Deposit Scheme pay no LMI with a deposit as low as 5% (2% for eligible single parents and legal guardians). Since 1 October 2025 the scheme has no income caps or place limits, but property price caps apply, so check eligibility before you rely on it.
With the default inputs, the estimated lmi premium is $20,700.00. Change any value above to recalculate instantly.
How to use the australia lmi calculator
- 1Enter the property value and the deposit you will contribute.
- 2Keep the indicative rate or enter the premium rate from a lender quote.
- 3Choose whether the premium is added to the loan or paid upfront.
- 4Turn on the 5% Deposit Scheme option if you have a government guarantee.
- 5Review the premium, the extra interest and the deposit needed to avoid LMI.
Formula and method
The loan-to-value ratio is the loan divided by the property value. LMI is usually required when the LVR is above 80%, and the premium is a percentage of the loan amount that increases with each LVR band. The calculator applies the indicative rate for your band (shown in the table) or a custom rate you enter, multiplied by the loan.
When LMI is capitalised it is added to the loan, so the LVR including LMI is higher and you pay interest on the premium for the whole term. That extra interest is the premium’s own principal-and-interest repayment over the term minus the premium itself. The deposit needed to avoid LMI is 20% of the value minus your current deposit.
- LVR
- Loan-to-value ratio, in percent
- Loan
- Property value minus deposit
- premium rate
- LMI premium as a percentage of the loan for your LVR band
Worked examples
$750,000 home with an 8% deposit
A $60,000 deposit leaves a $690,000 loan, an LVR of 92%. At the indicative 3.0% rate LMI is $20,700. Adding it to the loan makes the total $710,700 (94.76% LVR) and costs about $23,979 in extra interest over 30 years at 6%. Another $90,000 of deposit would avoid LMI entirely.
$600,000 home, 15% deposit, quoted rate of 1.1%
The loan is $510,000 (85% LVR). With a quoted premium of 1.1% the LMI is $5,610, paid upfront, so the loan stays at $510,000 with a repayment of $3,057.71 a month at 6% over 30 years.
First home buyer using the 5% Deposit Scheme
A 5% deposit on $700,000 means a $665,000 loan at 95% LVR. Because the loan is guaranteed under the government scheme, no LMI is charged — without it, the indicative premium would be about $25,900.
Frequently asked questions
When do you have to pay LMI in Australia?+
Most lenders charge lenders mortgage insurance when you borrow more than 80% of the property value, which means a deposit of less than 20%. Some lenders waive it for certain professions, and government-guaranteed loans for eligible first home buyers carry no LMI.
How much does LMI cost?+
It depends on your LVR, loan size, lender and insurer. As a rough guide premiums run from around 1% of the loan just above 80% LVR to roughly 4% or more at 95%, and state stamp duty may be added. Always get an exact quote from your lender.
Can LMI be added to the home loan?+
Yes. Most lenders let you capitalise the premium so you do not pay it upfront, as long as the total LVR including LMI stays within their limit (often around 95% to 97%). You then pay interest on the premium for the life of the loan.
Is LMI refundable if I sell or refinance?+
Generally no. A few insurers offer a partial refund if the loan is discharged within the first year or two, but in most cases LMI is a one-off cost that is not refunded and does not transfer to a new lender.
How can I avoid paying LMI?+
Save a 20% deposit, use a family guarantee, check whether your profession qualifies for an LMI waiver, or, if you are an eligible first home buyer, use the Australian Government 5% Deposit Scheme, which has no LMI.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.