Skip to main content Skip to log on Skip to search Accessibility at CommBank

Home loans / Lenders Mortgage Insurance (LMI)

How it works

  • Lenders Mortgage Insurance (LMI) is a one-off, non-refundable, non-transferrable premium that's added to your home loan. It's calculated based on the size of your deposit and how much you borrow. The more you contribute to the purchase price of your property, the lower the cost will be. LMI protects the bank against any loss we may incur if you are unable to repay your loan.

    The circumstances of your home loan will determine whether LMI or a Low Deposit Premium (LDP) may apply. This includes when you restructure your home loan, top it up or refinance. This is because there may be an increased risk associated with each application.

    We require you to take out LMI where there is an increased risk associated with your loan. 

    Example

    • If you want to buy a house that’s worth $500,000, we would typically require you to have a deposit of $100,000 (20% of the property’s value). If you’ve only saved $50,000, but you have sufficient income to support the loan, you may be able to take advantage of Lenders Mortgage Insurance. We would then lend you the $450,000 needed to buy your new home. 

    Our Home Lending Specialists can help explain when Lenders Mortgage Insurance may apply to your home loan, how much it will cost and what happens if there is a shortfall debt. 

    Download our Low Deposit Options guide (PDF)

Features & benefits

    • Enter the property market sooner by taking out a home loan with a smaller deposit
    • Stop paying rent
    • Start growing equity in a home
    • By having LMI or LDP, you won't need to rely on a guarantor to supply additional security to secure your home loan

Other low deposit borrowing options

  • Low Deposit Premium

    Similar to Lenders Mortgage Insurance, this additional cost can help you get your home loan with a smaller deposit.

    Tell me about LDP

  • Property Share

    Split the cost of a home with family or friends, while keeping individual control of your finances. Available for most home loans.

    Find out about Property Share

  • Guarantor Support

    A family member can help you secure a home loan by mortgaging their own property as additional security.

    Tell me about Guarantor Support

  • Home Guarantee Scheme

    You may be able to buy your first home sooner with a smaller deposit.

    Find out more about the Scheme

Frequently asked questions

LMI stands for Lenders Mortgage Insurance. It’s a type of insurance that helps protect the lender in case you’re unable to repay your home loan. LMI is usually required if your Loan-to-Value Ratio (LVR) is above 80%, meaning you have a deposit of less than 20% of the property’s value. While LMI helps protect the lender, it’s important to note that the cost is typically passed on to the borrower as a one-time premium, which is added to the loan amount.

The cost of Lenders Mortgage Insurance (LMI) varies depending on several factors, including your Loan-to-Value Ratio (LVR), the size of your loan, and the lender's specific policies. Generally, LMI can range from 1% to 5% of your loan amount. For example, on a $500,000 loan with a 10% deposit, LMI could cost over $10,000. If you have a deposit of 20% or more, you typically won't need to pay LMI. 

Our Home Lending Specialists can help explain when Lenders Mortgage Insurance may apply to your home loan, how much it will cost and what happens if there is a shortfall debt.  

Things you should know

    • LMI is designed to protect us (CommBank), not you (the borrower), against the risk associated with providing you with a low deposit home loan and the potential loss we may incur if you’re unable to repay your home loan
    • All premiums are capitalised (added) to the total home loan amount when your home loan is settled. This means you’ll pay more interest over the agreed contracted loan term   
    • If you're unable to repay your home loan, we may step in to assist with the sale of the property. If the proceeds from the sale are not enough to pay off the loan in full, our insurer, Helia, may seek to recover the remaining debt from any borrower(s) (you) and, where applicable, any guarantor(s) on the home loan
    • If we ask you to pay LMI we won’t ask you to pay a Low Deposit Premium
    • You can get indicative quotes for LMI using our stamp duty (upfront costs) calculator

Tools & support

Message us 24/7

Get help from Ceba in the CommBank app or connect with a specialist who can message you back. You’ll need CommBank app notifications turned on so you know when you’ve received a reply. 

Message us

We're here to help