How LMI is Calculated in Australia

Lenders Mortgage Insurance (LMI) is a one-time premium charged when you borrow more than 80% of a property's value — that is, when your LVR exceeds 80%. This calculator estimates your LMI premium using published Helia and QBE tiered rate schedules, deducts stamp duty and government fees from your savings to find your true deposit, and runs four additional analyses: a buy-now vs wait comparison, a deposit sensitivity table, the true lifetime cost of capitalised LMI, and a waiver and scheme eligibility checker.

LMI costs by state — NSW, VIC, QLD, WA and more

The LMI premium rate is the same regardless of which state you buy in — it depends only on your loan amount and LVR tier. What does vary by state is stamp duty, which is deducted from your savings before your deposit is calculated. Higher stamp duty means a smaller effective deposit, which pushes your LVR above 80% more easily and increases LMI costs. On an $800,000 established home bought to live in, stamp duty is approximately $30,188 in NSW, $21,850 in QLD, $43,070 in VIC and $32,315 in WA. QLD is the one state whose investor schedule differs materially — a QLD investor pays around $29,025 on the same purchase, which is why this calculator asks whether you will live in the property. First home buyers receive significant concessions: NSW FHBs pay no stamp duty on properties up to $800,000; QLD FHBs pay no duty on new homes and land (from May 2025). Select your state in the sidebar — this calculator applies the correct concessions automatically.

Customise your scenario

1. Change savings and property price to match your situation.
2. Select your state and first-home-buyer (FHB) status.
3. Choose owner-occupied vs investment and your property type.
4. Open Buy vs Wait and enter your monthly savings and property growth estimate.
5. Select your profession to check LMI waiver eligibility in the Waivers tab.
6. Open Advanced Options to adjust interest rate, loan term, and tax rate.
7. Hit Calculate to update all results.

What each section shows

• Your Numbers: Upfront costs, deposit, loan amount, and LMI in a snapshot.
• Buy Now vs Wait: Compares the LMI cost of buying today to the property growth you'd miss while saving to 20%. Uses your monthly savings and growth rate assumption.
• Deposit Comparison: A table showing LMI at 5%, 8%, 10%, 12%, 15% and 20% deposit, plus how many months you'd need to save to reach each level.
• True Cost of LMI: If you capitalise LMI into your loan, you pay interest on it for decades. This section shows what LMI actually costs vs what it says on the tin. Also shows the after-tax cost for investment properties.
• Waiver Eligibility: Checks your profession, FHB status, single parent status and area tier against government schemes (both pathways of the Australian Government 5% Deposit Scheme — the 5% first-home pathway and the 2% single-parent pathway) and lender-specific professional waivers.

Behind the math

1. Upfront costs = stamp duty (with FHB concessions) + reg. fees + other costs.
2. Deposit = savings − upfront costs.
3. Loan (pre-LMI) = property price − deposit.
4. LVR = loan ÷ price × 100.
5. LMI = tiered % of loan + insurance duty. Investment loading ~15% applied if purpose = invest.
6. Loan (post-LMI) = pre-LMI loan + LMI (if capitalised).
7. Buy Now vs Wait: property price × (1 + growth%)^(months/12) to compute future price; missed growth compared to LMI cost.
8. True cost: standard loan amortisation formula for LMI portion over full loan term.
9. Tax deduction: LMI ÷ 5 × marginal tax rate × 5 = total tax saved over 5-year amortisation period.

Limitations & assumptions

• Stamp duty figures are estimates; actual may differ. ACT and NT noted as approximate.
• LMI rates reflect published Helia/QBE tiered schedules — actual lender rates vary.
• Professional waiver availability and LVR limits vary by lender and change over time — confirm with a broker.
• The Australian Government 5% Deposit Scheme price cap is set by postcode, and suburbs can span postcodes in different caps. The state and area selector here is a coarse approximation — confirm your postcode against the official property price cap tool at firsthomebuyers.gov.au. The scheme also requires Australian citizenship or permanent residency, no prior property ownership in Australia, and that you live in the home; none of those are tested here.
• Property growth rate is your assumption; past performance does not predict future returns.
• Tax deduction estimate is indicative — consult a tax advisor.
• All figures in AUD. FHB concessions apply for owner-occupiers only.

Glossary

• LMI: Premium when LVR >80%, protecting the lender (not you).
• LVR: Loan ÷ property price (%).
• Stamp duty: State tax on property purchases; FHB exemptions may apply.
• FHB: First-time owner-occupier buyer; may attract state concessions.
• Capitalise LMI: Add LMI to your loan balance instead of paying upfront.
• 5% Deposit Scheme: the Australian Government 5% Deposit Scheme (renamed from the First Home Guarantee on 1 October 2025) — enables eligible FHBs to buy with a 5% deposit and no LMI. It absorbed the former Regional First Home Buyer Guarantee, and has no income test and no annual place cap.
• Single-parent pathway: the 2% deposit pathway within the Australian Government 5% Deposit Scheme, for single parents and legal guardians of a dependent child. It was the separate Family Home Guarantee until 1 October 2025, when it was absorbed into the 5% Deposit Scheme. It shares that scheme’s property price caps — there is no second cap table — and has no income test, no place cap and no waitlist. What differs is the deposit (2% rather than 5%, with the government guaranteeing up to 18% of the property value) and the eligibility test: you must be single, be the natural parent, adoptive parent or legal guardian of one or more dependent children, and apply alone. Unlike the 5% pathway it is not a first-home-buyer test — you may have owned property in the past 10 years, provided you hold no other property interest once the new home settles.

Frequently asked questions about LMI in Australia

• What is LMI? A one-time insurance premium charged when you borrow more than 80% of a property's value (LVR > 80%). It protects the lender — not you — if you default. It is typically capitalised into your loan, meaning you pay interest on it for years.
• How much is LMI on a $600,000 property? Roughly $5,500 with a 15% deposit (85% LVR), $9,500 with a 10% deposit (90% LVR), or about $17,200 with a 5% deposit (95% LVR), including insurance duty. Use this calculator for a precise figure based on your state and deposit.
• How much is LMI on an $800,000 property? Typically around $9,350 at 15% deposit, $15,800 at a ~89% LVR (after stamp duty reduces savings), or about $31,400 at 95% LVR. Your state's stamp duty significantly affects the final number — on an $800k owner-occupied purchase NSW duty is about 38% higher than QLD ($30,188 vs $21,850), and VIC is higher again ($43,070).
• How much deposit do I need to avoid LMI? At least 20% of the purchase price, keeping your LVR at 80% or below. You can also avoid LMI with a smaller deposit through the Australian Government 5% Deposit Scheme — 5% on its first-home pathway, or 2% on its single-parent pathway — a profession-based lender waiver, or a guarantor loan.
• Is LMI different in NSW vs QLD? The LMI rate is identical across states — it's based on loan size and LVR. What differs is stamp duty: on an $800k established home bought to live in, NSW charges ~$30,188 and QLD ~$21,850, so NSW is about 38% higher. (A QLD investor pays ~$29,025 on the same purchase.) QLD FHBs pay no stamp duty on new homes (from May 2025), while NSW FHBs pay none on any property up to $800,000. Lower stamp duty means a bigger effective deposit and lower LVR.
• Should I pay LMI upfront or add it to the loan? Adding it to the loan means paying interest on it for 25–30 years, which can more than double the true cost. Paying upfront saves money if you have the cash. The True Cost tab shows the exact dollar difference for your scenario.
• Can I avoid LMI? Yes: 20%+ deposit, the Australian Government 5% Deposit Scheme (5% deposit, or 2% on its single-parent pathway), a profession waiver, or a guarantor. The Waivers tab checks these against your inputs. The Regional First Home Buyer Guarantee no longer exists separately — it was merged into the 5% Deposit Scheme on 1 October 2025.
• Is it better to buy now with LMI or wait? In most rising markets, paying LMI is cheaper than the property growth you'd miss while saving to 20%. The Buy vs Wait tab models your specific numbers using your monthly savings rate and growth assumption.
• Is LMI tax deductible? For investment properties only — as a borrowing expense spread over 5 years. Not deductible on your primary residence. The True Cost tab estimates the after-tax net cost at your marginal rate.
• What is the Australian Government 5% Deposit Scheme? A federal scheme, renamed from the First Home Guarantee on 1 October 2025, where the government guarantees part of your purchase so eligible first home buyers can buy with just a 5% deposit and no LMI. Since that date there is no income test and no annual cap on places, and the former Regional First Home Buyer Guarantee has been merged into it. Property price caps still apply and are set by postcode. Apply through a participating lender.

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Disclaimer: This tool provides general estimates only and is not financial advice. Tepuy Solutions makes no guarantees as to accuracy. Seek professional guidance before making financial decisions. See our full disclaimer.