Lenders Mortgage Insurance (LMI)

A deposit of 20% is required, as it’s typically the amount a lender classifies as ‘safe’. Occasionally, you may need to provide more. If you haven’t saved 20% but have sufficient income to support your home loan, you may be eligible for Lender’s Mortgage Insurance(LMI). With LMI, Unloan can lend you up to 90% of your new home’s value. Learn more about LMI.

From $10,000 to $10,000,000.

Total borrowings per customer across all Unloan loans is limited to $10,000,000.

(For an Unloan home loan with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).

You need to have at least 20% equity in your property (80% Loan-to-Value-Ratio). When you refinance your home with us, we’ll get an updated valuation of your property to make sure your LVR is 80% or less. Learn more about our eligibility requirements.

We may be a good match for each other if:

• You’re refinancing a residential property for up to 80% of its current value
• You’re 18 and over and have an Australian Drivers Licence or Australian Passport that is valid or expired within the last two years
• You earn a PAYG or self-employed income

Learn more about our eligibility criteria.

We calculate your monthly home loan repayment by considering the following factors:

• The total loan amount, including the Lender’s Mortgage Insurance (LMI) premium if applicable*
• The estimated total interest charged over the loan term (until the loan settlement date),
• The annual rate discount that increases every year (up to 30 years)

We divide that total amount by up the length of your loan term to determine your monthly repayment.

Please note that these calculations for home loans are based on our current advertised rate, and assume this rate continues for the life of the loan. Interest rates may change at any time.

*If your Loan-to-Value Ratio (LVR) for a new home loan application is between 80.01% and 90%, you’ll require Lender’s Mortgage Insurance (LMI). For refinance and Top-Up applications we only accept applications with an LVR of 80% or less.

LMI insurance premium is non-refundable and non-transferable. This applies even if you:

• Choose to pay out, close or refinance your home loan early
• The LVR of your home loan drops below 80% after settlement

Note: If you have Lender’s Mortgage Insurance (LMI) on one home loan and want to apply for another home loan, you’ll most likely have to pay for LMI again if your LVR is greater than 80% (or in some circumstances lower). Each LMI premium is unique to the specific home loan it covers.

To reduce or avoid paying the LMI premium, consider saving up for a larger deposit. At Unloan, LMI premiums are charged when the Loan to Value ratio (LVR) for a new home loan application is between 80.01% and 90%.

While not offered by Unloan, some other options may include:

• A Low Deposit Premium, also known as LDP is a one-off, non-refundable, non-transferrable fee offered by some lenders that’s added to your home loan. It protects your lender against any loss they may incur if you’re unable to make repayments on your loan.
• A guarantor. A guarantor is someone, for e.g. a family member, who agrees to be responsible for your home loan repayments in any situation where you’re unable to make repayments. They help you secure a home loan by agreeing to offer their own property as additional security.

No, it’s a one-off non-refundable, non-transferrable charge.

Lender’s Mortgage Insurance, or LMI, is insurance that the lender takes out to protect itself in the event that you as the borrower can’t repay your mortgage.

LMI is:

• A one-off, non-refundable, non-transferrable premium that’s added to your home loan.
• It is collected by your lender and passed on to their insurance provider.
• It’s calculated based on the size of your deposit and how much you’re looking to borrow.
• Protects your lender against any loss they may incur if you’re unable to make loan repayments.

Learn more about LMI

LMI protects your lender in the event you’re unable to repay your home loan, and there is a ‘shortfall’. A shortfall debt occurs when the proceeds from the sale of your home are insufficient to repay the home loan. Your lender may be able to recover the shortfall from the LMI insurance provider, but:

• The borrower(s) are liable to pay the shortfall debt, so the LMI provider may seek to recover the shortfall amount from you.

It’s important to remember that LMI doesn’t provide you with any protection – it’s there for your lender’s protection.

While you might not think that paying thousands of dollars in LMI could possibly offer any benefits, it turns out there are a few advantages to taking out LMI.

• Buy a property sooner: saving for a home is tough but LMI can help you get into the property market sooner than if you had to keep saving towards a 20% deposit. LMI can help to make homeownership more accessible for potential buyers who are struggling to save a substantial deposit.
• Stop paying rent: by entering the property market sooner, you’re able to stop paying rent. That way you can start contributing to your own investment and watching it grow.
• Start growing your home equity: as you slowly start chipping away at your mortgage, the equity in your home will grow. During the time you own your property, you might be able to take advantage of asset appreciation, which can also help to grow your home equity.
• No need to rely on a guarantor: with LMI, there’s no need to worry about finding a guarantor to support your low deposit loan.

It’s calculated based on the size of your deposit and the amount you borrow. The more you contribute to the purchase price of your property, the lower the LMI cost will be.

Yes, but they will have to be individual applications. You can have several loans with Unloan, however the value of all loans can’t exceed $10,000,000.

If any of your loans have Lenders Mortgage Insurance (LMI), then the total value of all of your loans is limited to $3,000,000.