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What is Lenders Mortgage Insurance (LMI)?

Lenders' Mortgage Insurance is insurance you’ll need to pay if you borrow more than 80% of a property’s value (i.e. if you have less than a 20% deposit). A 70% LMI is required for high-density units when applying for the Tiimely Own Home Loan or with certain lenders. This means you will need a deposit of at least 30% of the property's value to avoid paying LMI.

It protects the lender from financial loss if you can’t afford to meet your repayments and default on the loan.

Factors that affect how much LMI will cost you include:

The size of the loan - the bigger your loan, the higher the cost of LMI.

Your deposit amount - the smaller the deposit, the higher the cost of LMI.

The purpose of the loan – investors can pay as much as 20% more for LMI than home buyers.

Your employment status – how much you earn and whether you work full time or casual can influence the cost of LMI.

The insurer used by your lender - premiums differ between insurers.

Ways to avoid paying LMI or reducing how much you pay can include

Growing your deposit to 20% or more

Having a family member go guarantor on your loan (While we don't offer guarantor loans for Tiimely Own Home Loans, we can assist you in finding a suitable guarantor loan through our in-house broker service).

Applying for the First Home Loan Deposit Scheme and

Comparing LMI quotes from a number of lenders.

LMI can cost you thousands of dollars, so if you want to avoid paying it, the best way is to save at least a 20% deposit before applying for a loan.

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Legal things about our rates
Our home loans are subject to credit criteria and eligibility requirements. Home loan interest rates are for new customers only and can change. Our comparison rates are based on a $150,000 loan amount over a 25 year term. They factor in fees associated with applying for the loan; ongoing fees and fees associated with leaving the loan. Our fixed loans roll to a variable principal and interest rate at the end of the fixed term. If the interest only period is not specified, the comparison rate is calculated on a one year period.

WARNING: The comparison rates are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Tiimely Turnaround™
^Our turnaround times are up to 2x faster than the industry, based on a comparison of our average platform submit to approval time compared to industry submit to approval time, published here  (June 2023). Customer turnaround times are dependent on individual circumstances and may require an assessor to obtain more information.

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Tiimely is a registered trademark of Tiimely Pty Ltd.