Deposit & LMI Calculator
See your loan-to-value ratio, estimate your lenders mortgage insurance, and find out how much deposit it takes to avoid LMI in 2026.
Estimate your LMI
Set your property price and your deposit. We will work out your LVR and the likely premium.
Guide only. Not financial advice. LMI is set by the lender’s insurer and varies by loan size, loan type, and profile. Confirm with a professional.
How much is LMI?
Lenders mortgage insurance is a one-off premium you pay when your deposit is less than 20% of the property value, and it climbs steeply as your loan-to-value ratio rises. As a rough guide it runs from under 1% of the loan around 83% LVR to close to 4% at 95% LVR. On a $650,000 home with a 10% deposit, that is in the order of $10,000 to $11,000. Use the calculator above to see your figure.
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The important thing to understand is that LMI protects the lender, not you. You pay the premium, but it covers the bank if you default and the property sells for less than the loan balance. Because it can run to tens of thousands of dollars, it is one of the most important upfront numbers to know before you start looking at homes.
How is LMI calculated?
LMI is based on your loan-to-value ratio, which is the loan amount as a percentage of the property value. Once your LVR goes above 80%, a premium applies, and it rises sharply in bands as the LVR increases. The premium is a percentage of the loan amount, so a larger loan at the same LVR costs more, and the jump from 90% to 95% LVR is particularly steep.
| Your LVR | Roughly what LMI costs |
|---|---|
| 80% or below | No LMI payable |
| 81% to 85% | Around 0.5% to 1% of the loan |
| 86% to 90% | Around 1.1% to 1.8% of the loan |
| 91% to 95% | Around 2.4% to 4% of the loan |
| Above 95% | Generally not available without a guarantor or scheme |
Insurers use detailed rate cards and the exact premium depends on the loan size, the loan type, and your profile. Investment and interest-only loans usually cost more. The figures here are indicative only.
LMI is worked out on the property’s value as assessed by the lender, which can be lower than the price you paid. If a valuation comes in under the contract price, your effective LVR rises and the premium can be higher than expected.
How to avoid or reduce LMI
There are four main ways to avoid LMI: save a 20% deposit so your LVR is 80% or below; use the First Home Guarantee, which lets eligible first home buyers purchase with as little as a 5% deposit and pay no LMI; have a family member act as guarantor using equity in their property; or qualify for a lender LMI waiver, available to some professions such as doctors and certain others.
| Strategy | How it helps |
|---|---|
| 20% deposit | Keeps your LVR at 80% or below, so no LMI applies and you usually access the best rates |
| First Home Guarantee | Eligible first home buyers can buy with a 5% deposit and pay no LMI, with the government guaranteeing part of the loan |
| Family guarantor | A family member uses equity in their property as additional security, often removing LMI even at a high LVR |
| Profession waiver | Some lenders waive LMI for selected professionals, sometimes up to 90% LVR, subject to criteria |
The First Home Guarantee can remove LMI entirely with only a 5% deposit. Before you assume you have to pay tens of thousands in LMI, it is worth checking whether you qualify, because it can change what you can buy and when.
Pay LMI upfront, or add it to the loan?
Most lenders let you capitalise LMI, which means the premium is added to your loan rather than paid in cash at settlement. That avoids a large upfront cost, but you then pay interest on the premium for the life of the loan, so the true cost is meaningfully higher than the premium itself. Paying it upfront costs more cash now but nothing in interest later.
Which option is better depends on how much cash you have at settlement and how long you expect to hold the loan. If you plan to refinance or sell within a few years, the interest cost of capitalising is smaller. If you will hold the loan a long time, paying upfront where you can afford it saves money overall.
Is paying LMI ever worth it?
Sometimes, yes. LMI lets you buy with a smaller deposit, which can mean entering the market years earlier. In a rising market, the growth you capture by buying sooner can outweigh the premium. The right answer depends on the market, the premium at your LVR, and how long it would otherwise take you to save a full 20% deposit.
This is exactly the kind of trade-off worth running the numbers on rather than assuming. For some buyers, waiting to save 20% is the smarter move. For others, paying LMI or using the First Home Guarantee to buy now is clearly ahead. Knowing your LMI figure is the starting point for that decision.
General information only. This calculator provides indicative estimates based on simplified 2026 LMI premium scales. It is not financial advice, a quote, or a guarantee, and your personal circumstances have not been considered. The actual LMI premium is determined by the lender’s mortgage insurer and varies by loan amount, loan-to-value ratio, loan type, property type, and your individual profile, and state stamp duty on the premium may also apply. Eligibility for the First Home Guarantee, guarantor arrangements, and profession waivers is subject to criteria. Always confirm your figures with a licensed mortgage broker or your lender. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.