Mortgage Insurance sounds like it is a product to help you, but it is designed to protect the bank for taking a higher risk in lending to someone with a smaller deposit. Let's break it down.
Lenders Mortgage Insurance is something that you’ll need to pay if your deposit is less than 20% in most cases.
You might be wondering, what is LMI for?
At first thought people commonly believe LMI is an insurance to protect themselves, it is an insurance after all. But that’s not right. LMI is actually there to protect your lender!
LMI is basically added to your loan, you don't have to come up with a further sum of cash to pay for your premium. We can work out your premium for you
You will then pay interest on the money you borrowed to pay the premium. But this is also pretty normal and your growth in your new home should well and truly outweigh the cost to benefit ratio.