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The trade-off
Waiting for a 20% deposit can avoid LMI, but it can also delay buying. Paying LMI can bring the purchase forward, but it increases loan costs and reduces equity at settlement.
There is no universal answer. The right decision depends on savings rate, property price movement, rent paid while waiting, interest rates and risk tolerance.
How to compare
Model both scenarios:
Compare LMI premium, extra interest, rent paid while waiting and the risk that the target property price rises.
Use the LMI Calculator, Deposit Savings Calculator and Buy vs Rent Calculator.
Sources: ASIC Moneysmart home loan and LMI guidance. General information only.
RealEstateCalc Editorial
Property & Finance ResearchThe RealEstateCalc editorial team researches and writes about Australian property, finance, and tax topics. All content is fact-checked against official sources including the ATO, state revenue offices, ASIC Moneysmart, and the RBA.
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