LMI Estimate Checklist: 8 Inputs to Check Before You Rely on a Premium

Short answer

An online LMI result is a planning estimate, not a premium quote. Before relying on it, check the loan amount, lender-accepted property value, LVR, borrower and property type, security state, payment method and any approved no-LMI pathway.

Use the LMI Calculator for an indicative scenario, then obtain the actual premium and capitalisation treatment from the lender. LMI protects the lender, not the borrower.

The 8-point LMI estimate checklist

1. Use the loan amount before or after LMI consistently

Start with the amount you intend to borrow for the property price. If the premium is capitalised, the final loan balance rises. Some lenders cap how much can be capitalised or reassess the resulting LVR.

2. Test the lender's property value, not only the contract price

LVR is loan amount divided by the value accepted by the lender. A lower valuation can raise the LVR even though the contract and deposit have not changed.

For example, a $720,000 loan is 90% of an $800,000 purchase price. If the lender values the property at $760,000, the same loan is about 94.7% LVR. Read the bank valuation shortfall guide before treating the contract price as fixed.

3. Check the LVR band boundary

LMI pricing is not usually linear. Moving above an insurer or lender band can change the premium more sharply than the increase in the loan amount suggests. Test a lower accepted valuation and a slightly higher loan amount when the scenario sits close to 80%, 85%, 90% or 95% LVR.

4. Select the actual borrower and property type

Owner-occupier, investor, house, apartment and vacant-land scenarios can be priced differently. The site's estimate uses broad illustrative bands. It does not reproduce a lender or insurer's proprietary rate card.

5. Check the security property's state or territory

Insurance duty can change the amount. RealEstateCalc treats an LMI policy over NSW property as exempt where the premium is paid from 1 July 2017, following Revenue NSW guidance. Tasmania's State Revenue Office lists mortgage insurance policy duty at 2% of premium.

If a loan is secured by property in more than one jurisdiction, the treatment may be different. Confirm it with the lender rather than adding a general insurance rate yourself.

6. Confirm whether the premium is paid upfront or capitalised

Paying upfront requires more cash at settlement. Capitalising the premium increases the loan and the interest paid while that amount remains outstanding.

The LMI Calculator shows a monthly and full-term interest effect when capitalisation is selected. The full-term figure assumes the entered rate does not change and the amount is not repaid early.

7. Do not assume first-home or joint-borrower discounts

There is no universal first-home buyer or joint-borrower discount in the RealEstateCalc estimate. A lender waiver, professional policy, guarantor structure or Australian Government guarantee may remove or alter LMI, but the lender must approve it.

Housing Australia schemes have separate eligibility, property and participating-lender rules. An online calculator cannot determine eligibility.

8. Compare the result with a written lender quote

Ask for the base premium, any duty, whether GST is included, the amount capitalised, the final loan balance and the resulting LVR. If the lender's number differs from the site estimate, use the lender's written quote for that application.

Worked example

Assume an owner-occupier is considering an $800,000 house with an $80,000 deposit and a $720,000 loan before LMI.

• Contract-price LVR: 90%.
• If the lender value is $780,000, LVR becomes about 92.3%.
• If an indicative $15,000 premium is capitalised, the loan balance becomes $735,000 before any other financed costs.
• At 6.0% over 30 years, financing that $15,000 adds about $90 a month if the rate stays constant.

The example does not predict the lender's premium or valuation. It shows why the value, LVR band and payment method must be checked together.

Common mistakes

• entering the cash deposit but forgetting stamp duty and purchase costs need separate funding;
• assuming a 20% deposit based on contract price guarantees an 80% lender LVR;
• treating LMI as borrower protection;
• comparing a capitalised estimate with an upfront quote;
• using a generic monthly income to estimate how long it will take to save the deposit gap;
• assuming an online result confirms eligibility for a government guarantee or lender waiver.

Use the Deposit Savings Calculator with your actual starting balance, monthly savings and interest assumption. Use the Property Purchase Cost Calculator to keep duty and settlement costs separate from the deposit.

Sources

• ASIC Moneysmart: lenders mortgage insurance, checked 19 July 2026.
• Revenue NSW: insurance duty exemptions, checked 19 July 2026.
• State Revenue Office Tasmania: insurance duty calculator, checked 19 July 2026.
• Housing Australia: support to buy a home, checked 19 July 2026.

General information disclaimer

This checklist provides general information only. It is not financial advice, credit advice, a premium quote, valuation, eligibility decision, loan offer or approval. Premiums and policies vary by lender and insurer. Confirm the written amount and terms with the lender.