When it comes to buying your new home, saving a 20% deposit can seem like a stretch. With flat wages and high house prices, it can almost feel unachievable.

What if there was a way to buy a house without a 20% deposit? If you’ve crunched the numbers and know servicing a loan is achievable, but gathering that initial saving for a house is a challenge, it’s time to explore Lenders Mortgage Insurance.

What is Lenders Mortgage Insurance (LMI)?

Lenders Mortgage Insurance, or LMI, is an insurance premium that helps you obtain a home loan should your initial mortgage deposit be less than 20%.

How does LMI help me buy a home sooner?

With LMI as protection, you can secure a home loan sooner especially if you have a time-sensitive buying opportunity.

If you are a first home buyer, saving up for a 15% deposit can be tough especially with rising house prices. LMI can help you get into your first home sooner with as little as a 5% deposit.

It is important to weigh up your situation and look at all the information you have gathered. If you don’t have the required minimum deposit, request for an LMI estimation during your loan application.

Can I avoid LMI?

Not having to pay an extra cost on top of your loan is ideal, but waiting to grow a home loan deposit isn’t necessarily the best option. There may be alternative ways to avoid or reduce LMI you haven’t considered.

  • Ask a family member, typically a parent, to be a guarantor. This is the act of having a family member provide equity in their own property as partial security for your loan. The guarantor is not the borrower. If for some reason you can’t pay your mortgage, the responsibility to make payments falls on the guarantor.
  • Unity Bank is currently offering a home loan with an 85% Loan to Value Ratio (LVR) for First Home Buyers. This means LMI is not required when you have a deposit of 15%, giving you an excellent savings on your first home! To learn more about our First Home Buyers offer, one of our lending specialists can go through the options in detail to help you make the best choice for your situation.*

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Remember: LMI should not be confused with Loan Repayment Insurance, which is designed to cover your repayments in the case of sickness, accident, or involuntary unemployment.


*Credit eligibility criteria, terms & conditions, fees & charges apply.