LMI Calculator Australia — Lenders Mortgage Insurance Estimate 2026

Last updated: 1 May 2026 Reviewed by Emma Hartley, CFP

**Lenders Mortgage Insurance (LMI)** protects the lender (not the borrower) if you default on a home loan with less than a 20% deposit. LMI is a one-time premium that can range from a few thousand dollars to over $30,000 depending on your loan amount and LVR — and is typically capitalised onto your loan. Borrowing $675,000 on a $750,000 property (90% LVR) can attract an LMI premium of approximately $13,800–$17,000. Eligible first home buyers can avoid LMI entirely through the **First Home Guarantee (FHG)**, which allows a 5% deposit with no LMI for qualifying properties under the government's price cap.

Property Value (A$) Purchase price or bank valuation

Deposit Amount (A$) Your available deposit (genuinely saved)

State / Territory LMI rates vary slightly by insurer and state

Loan-to-Value Ratio (LVR) —

Loan Amount Required —

Estimated LMI Premium —

LMI Added to Loan —

View Year-by-Year Breakdown

Real-World Examples — 2026

10% deposit on $750,000 property — 90% LVR

A buyer purchasing a $750,000 property in Sydney with a $75,000 deposit (10%) borrows $675,000 at 90% LVR. Estimated LMI premium is approximately $13,800–$17,000 depending on insurer. If capitalised onto the loan, total borrowings become approximately $692,000 and the LMI is repaid with interest over the loan term.

5% deposit — 95% LVR, no FHG

Borrowing 95% on a $600,000 property ($30,000 deposit, $570,000 loan) incurs an LMI premium estimated at approximately $22,000–$28,000. Using the First Home Guarantee instead eliminates this cost entirely for eligible buyers, provided the property is within the price cap ($900,000 for NSW as of FY2026).

Frequently Asked Questions

What is LMI in Australia?

Lenders Mortgage Insurance (LMI) is insurance that protects the lender (not the borrower) if you default on your home loan. It is typically required when your LVR exceeds 80% — that is, when your deposit is less than 20% of the property value. LMI is a one-time premium, usually capitalised onto your loan.

How much does LMI cost in Australia?

LMI premiums vary by LVR and loan amount. As a rough guide: on a $600,000 loan at 90% LVR (10% deposit), LMI is approximately $11,000–$16,000. At 95% LVR, it can exceed $25,000 on the same loan. The premium is calculated by Genworth or QBE using actuarial tables and varies by lender.

Can I avoid paying LMI?

You can avoid LMI by saving a 20% deposit, using a guarantor (parental guarantee loan), or accessing certain government schemes such as the First Home Guarantee (FHG), which allows eligible first home buyers to borrow with a 5% deposit and no LMI, with the government guaranteeing up to 15% of the loan.

Is LMI tax deductible in Australia?

For investment properties, LMI is generally tax-deductible, spread over 5 years or the loan term (whichever is shorter). For owner-occupied properties, LMI is not tax-deductible as it is a capital expense. Always confirm with a tax agent or the ATO.

What is the First Home Guarantee (FHG)?

The First Home Guarantee (FHG), administered by Housing Australia, allows eligible first home buyers to purchase with as little as 5% deposit without paying LMI. The government guarantees the remaining 15% to the lender. Places are limited each financial year (35,000 places in FY2025–26). Income and property price caps apply by state.