LMI Calculator

What is an LMI Calculator?

An LMI calculator estimates the Lenders Mortgage Insurance premium you’ll pay when buying a property with less than a 20% deposit in Australia. LMI is a one-off insurance premium that protects the lender — not you — if you default on your home loan. It exists because loans above 80% LVR (loan-to-value ratio) carry more risk for the bank.

LMI is one of the most misunderstood costs in home buying. It can range from a few thousand dollars at 85% LVR to well over $30,000 at 95% LVR on an expensive property — and most buyers don’t discover the figure until deep into their loan application. This calculator gives you the estimate upfront so you can decide whether to buy now and pay LMI, or save a bigger deposit first.

How is LMI Calculated?

LMI premiums are set by the insurer using a rate matrix based on two factors: your LVR band and your loan size tier. Higher LVR and larger loans both increase the rate. Most states then add insurance duty (stamp duty on the premium) of 9–11%.

How to Use This LMI Calculator

Enter the property purchase price and your available deposit, select your state (for insurance duty), and indicate whether you’re a first home buyer. The calculator works out your LVR, looks up the matching premium rate band, adds state duty, and shows your total estimated LMI. The comparison table then shows what your LMI would be at 5%, 10%, 15%, and 20% deposits on the same property — so you can see exactly what each extra dollar of savings is worth.

What Your Results Mean

The headline figure is your total estimated LMI including state insurance duty. LVR is your loan as a percentage of the property value — the single number that determines whether LMI applies and how much. Deposit to avoid LMI shows the 20% threshold for your property, and extra deposit needed is the gap between where you are and LMI-free. The deposit comparison table is the most valuable part: it shows how dramatically LMI drops as your deposit grows, particularly the jump between 90% and 85% LVR.

Is This Calculator Accurate?

This calculator uses representative rate bands modelled on published estimates from Australia’s major LMI insurers. Actual premiums vary between insurers and lenders, and can differ based on whether you’re an owner-occupier or investor, your employment type, the loan product, and whether the premium is paid upfront or capitalised. Treat the result as a realistic planning estimate — your lender or broker will quote the exact figure before settlement.

How to Choose Your Inputs

Property price: Use the contract price, or the bank valuation if it’s lower — lenders calculate LVR on the lower of the two. Deposit: Enter your genuine deposit only — remember stamp duty, conveyancing, and other costs come out of your savings too, so your effective deposit may be smaller than your total savings. State: This sets the insurance duty rate applied to the premium. First home buyer: If eligible for the Home Guarantee Scheme, you may pay zero LMI with just 5% deposit — check the income and price caps for your city.

Suitable for Women

Yes — LMI applies identically regardless of who’s borrowing. One scheme worth knowing: the Family Home Guarantee allows eligible single parents (around 80% of whom are women) to buy with as little as a 2% deposit and no LMI, with the government guaranteeing the difference. If you’re a single parent with dependants, this can save $20,000–$40,000 in LMI on a typical purchase — check eligibility before assuming you need to pay LMI.

Suitable for Men

Yes — the same rates and thresholds apply to everyone. Worth noting for higher-income professionals: many lenders waive LMI entirely at up to 90–95% LVR for eligible occupations including doctors, dentists, lawyers, accountants, and some engineers and athletes. If you’re in a professional occupation, ask your broker about LMI waiver policies before paying a premium you might not need to.

Can I Use This to Decide Whether to Buy Now or Save Longer?

That’s exactly what it’s for. Compare your LMI cost at today’s deposit against the time it would take to save to 20%. In a rising market, paying $15,000 of LMI to buy a year earlier can be cheaper than watching the property rise $50,000 while you save. In a flat market, waiting and saving often wins. Run your numbers at your current deposit and at 20%, then weigh the LMI against realistic price growth and rent you’d pay while saving — there’s no universal answer, but now you have the actual figures.

Common Mistakes to Avoid

• Forgetting purchase costs eat your deposit. Stamp duty and fees can consume $20,000–$40,000 of savings, pushing your real LVR higher than you planned.
• Ignoring the cost of capitalising LMI. Adding the premium to your loan means paying interest on it for decades — the true cost is roughly double the premium.
• Not checking the Home Guarantee Scheme first. Eligible first home buyers with 5% deposits can skip LMI entirely — yet many pay it unnecessarily.
• Missing professional LMI waivers. Doctors, lawyers, accountants and other professions can often borrow to 90%+ with zero LMI.
• Thinking LMI protects you. It protects the lender only. If you default, the insurer can still pursue you for the shortfall.

Limitations of This Calculator

Premium rates vary between insurers and lenders, and this calculator can’t capture lender-specific pricing, investor vs owner-occupier loadings, self-employed adjustments, or capitalisation interest. It also doesn’t assess your eligibility for the Home Guarantee Scheme, Family Home Guarantee, or professional waivers — those depend on income caps, property price caps, and occupation rules that change yearly. For independent information on LMI, see Moneysmart’s LMI guide.

Frequently Asked Questions