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LMI premiums are primarily driven by your Loan-to-Value Ratio (LVR) — the percentage of the property value you're borrowing. The higher your LVR (smaller deposit), the more you pay in LMI. The cost curve is exponential, not linear — going from 85% to 90% LVR can double your LMI p
At 95% LVR, the lender's risk is greatest — even a small property value decline could mean negative equity. LMI insurers price this risk exponentially higher. A borrower at 95% LVR is roughly 5x more likely to face financial stress than one at 85% LVR.
Yes. Different lenders use different LMI providers (Genworth/Helia or QBE), and they may negotiate different premium rates. A broker can compare LMI costs across lenders as part of the total loan comparison.
Yes. Under the FHBG, the government guarantees the portion between your 5% deposit and 20%, so the lender doesn't require LMI. This can save $15,000–$40,000 on typical first home purchases.
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