Lenders mortgage insurance usually costs a few per cent of the loan, rising steeply as your deposit shrinks. Published lender examples put it at about 2.5% to 3.7% of the loan with a 10% deposit, and about 4.8% with a 5% deposit. On a $720,000 loan at 90%, one major bank’s own example shows $17,699. With a 15% deposit it is lower again.

Estimated LMI by deposit size
Purchase price 5% deposit 10% deposit 15% deposit
$600,000 $570,000 loan: about $27,000 $540,000 loan: about $13,000 to $20,000 $510,000 loan: lower, often well under the 90% figure
$800,000 $760,000 loan: about $36,000 $720,000 loan: about $18,000 to $27,000 $680,000 loan: lower, often well under the 90% figure
$1,000,000 $950,000 loan: about $45,000 $900,000 loan: about $22,000 to $33,000 $850,000 loan: lower, often well under the 90% figure

LMI ranges use the premiums in published ANZ and Westpac examples (about 2.5% to 3.7% of the loan at 90%, about 4.8% at 95%); real premiums depend on the lender, insurer and loan. The LMI calculator gives a broad estimate on your own figures, and a lender quote gives the exact premium.

What decides the premium?

  • Your LVR: the biggest factor. The step from 90% to 95% roughly doubles the premium as a share of the loan in the examples above.
  • The loan size: larger loans often attract a higher rate, not just a bigger dollar amount.
  • The insurer and lender: each prices its own way, so the same loan can cost different amounts.
  • The loan type: investment and self-employed loans can cost more.

If you want to know where your LVR sits, what is LVR explains how it is worked out.

Can you add LMI to the loan?

Usually, yes: most lenders let you capitalise the premium so you do not pay it in cash. You then pay interest on it for the life of the loan, and it lifts your LVR slightly, which some lenders cap. Paying it from savings is cheaper if you can do so and still keep a buffer.

Do you get LMI back if you sell or refinance?

Rarely. The premium protects the lender, and a refund, where one exists at all, is usually small and only in the first year or two. The guide to LMI covers refunds and how the insurance works.

How can you avoid LMI?

Is paying LMI ever worth it?

Sometimes. If saving the last 10% would take years while prices rise, paying the premium and buying sooner can cost less than waiting. The trade-off is personal, and the buy now or save more calculator puts numbers on it.

Questions people ask

How much is LMI on a 10% deposit?

In published lender examples, about 2.5% to 3.7% of the loan: roughly $18,000 to $27,000 on a $720,000 loan.

How much is LMI on a 5% deposit?

About 4.8% of the loan in one major bank’s example: roughly $36,000 on a $760,000 loan. Eligible first home buyers can avoid it with the 5% Deposit Scheme.

Is LMI tax deductible?

On an investment property it is generally claimed as a borrowing cost over five years or the loan term if shorter. On your own home it is not deductible.

Charles Touma gets real LMI quotes before you decide, and checks every way to reduce or remove the premium first. A free 30-minute call covers your deposit and the cheapest route. General information only, not credit advice; scheme rules and lender policies change, and eligibility is confirmed when you apply.

Sources: ANZ, LMI waiver for legal professionals (August 2024, example premium); ANZ, LMI waiver for medical professionals (August 2024, example premium); Westpac, saving a deposit (LMI example); Moneysmart, lenders mortgage insurance, checked 20 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.