Equity Release › Will I pay lenders mortgage insurance when releasing equity?

Will I pay lenders mortgage insurance when releasing equity?

If releasing equity pushes your loan above around 80 percent of your home value, lenders mortgage insurance usually applies. Keeping the new loan at or below 80 percent generally avoids it.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

Lenders mortgage insurance protects the lender, not you, and it can be a significant cost. The 80 percent threshold is the line that matters. If your equity release stays under it, you usually avoid the premium. If it goes over, the insurance cost should be weighed against the benefit of accessing the extra funds.

The key points

Insurance usually applies above around 80 percent of value.
Staying at or below 80 percent generally avoids it.
The premium can be a significant cost.
Weigh the cost against the benefit of the extra funds.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.