How Do I Save Thousands On Lenders Mortgage Insurance?
If you are in the market to purchase a home to live in and meet the criteria below, you can save thousands in Lenders Mortgage Insurance (‘LMI’) and achieve special interest rate discounts.
This is due to a recent change in policy where Professional Home Loans can now offer a discounted waiver to just 85% of Lenders Mortgage Insurance to an expanded list of occupations that was previous limited to medical practitioners, lawyers and a few other industries.
The Criteria to Save Thousands in LMI
To achieve a special interest rate concession and save thousands in LMI you will need to;
- Fit in one of the occupation classes listed below,
- Have 1 year in your current employment or have worked in same industry/profession for 2 years
- Possess a clean credit file (credit history) free from defaults, bankruptcies etc,
- 5% genuine savings (that is, some of your deposit must be from your own savings)
- Have sufficient deposit for minimum 10% plus stamp duty and purchasing costs,
- Be an Australian Citizen or Permanent Resident, and otherwise be in a sound financial position and meet general lender credit policy
If you meet this criteria and are looking to buy a home to live in you really cannot afford to not put in a call to Professional Home Loans to see if we can help you.
Occupations entitled to this special offer:
- Ambulance Officers
- Academics/Education Professionals
- Qualified Trades including
- Human resources
- IT professionals
- Cabin crew
- Managers/Department Managers of
major franchise groups (e.g. McDonalds,
Subway, Woolworth’s, Coles, etc.)
Don’t you see your occupation on this list?
If your occupation is not listed above but you otherwise meet the criteria please get in touch to see if we may still be able to help you.
How much will I save in LMI?
LMI premiums, like all insurance premiums, are priced based on the risk of the insured event happening. That is, the more likely that a borrower will default on the mortgage and the bank will suffer a loss, the more expensive the premium will be. See below explanation of LMI.
As such, LMI is not a flat rate but will vary depending on the size of the loan and the LVR. Here are some examples of a typical LMI premium for a 90% lend based on various loan amounts.
|Loan Amount||LMI Premium|
As is evident from the above table, for an average loan size of $500,000 the LMI would be circa $8,600 which we can get discounted to 85% plus special discounted interest rates. This savings in conjunction with market leading interest rates will save you thousands off your mortgage.
Already Found a Home to Buy?
Due to high application volume please either note in your online enquiry that you have found a home to buy already or call us on 1300 55 44 97 so we can give you priority service.
What is Lenders Mortgage Insurance?
Lender’s mortgage insurance is insurance that protects the BANK/LENDER in the event of buyer default. The easiest way to explain it is to compare it to a person insuring their car. In the event of an accident or theft the insurance company will pay out the car owner to either fix the car or buy a new car. LMI is similar in that it pays out the bank should the borrower default on the mortgage and the bank makes a loss on the sale. However, where the car owner pays the car insurance and receives the benefit, with LMI it is the borrower that pays the insurance and the bank that receives the benefit.
Do all loans require Lenders Mortgage Insurance?
No. As a general rule only loans greater than 80% LVR (‘Loan to Value Ratio’) are mortgage insured. A borrower with a 20% deposit (plus costs) would not usually be required to pay the bank’s LMI premium.
Does LMI protect the borrower?
No. LMI protects the bank in the event of default, not the borrower. Borrowers are advised to take out their own personal life and income protection insurances as protection against unforeseen circumstances.