Lenders Mortgage Insurance (LMI)

Lenders Mortgage Insurance (LMI) is a one-time premium paid by a borrower when borrowing more than 80% of a property's value. It protects the lender if the borrower defaults on the loan, not the borrower themselves. This insurance allows borrowers to buy a property with a smaller deposit but adds to the overall cost of the loan. LMI is usually payable upfront or added to the loan amount, and it provides lenders confidence to lend larger sums with lower deposits while managing their risk.