If you are buying a property and have less than a 20 per cent deposit, you may be required to pay Lender’s Mortgage Insurance (LMI). LMI does not cover the borrower, it is in place to insure the lender against non-payment or default on your loan.
When you take out a loan, you pay a once-off fee to the lender. Fees vary according to the amount borrowed and the size of your deposit. You can pay the fee up-front or add it to the total loan amount.
The benefit of Lenders Mortgage Insurance is that it allows people to buy a home sooner with a smaller deposit. The downside is the cost; LMI can be a considerable extra amount to add to your loan.
How much can I borrow?
What will my repayments be?
How much Stamp Duty will I pay?