Lenders Mortgage Insurance (LMI) is an insurance a bank or lender takes against your loan. LMI protects banks and lenders from financial loss if you can’t meet your loan payments.
LMI allows you to get a home loan even if you don’t meet the bank’s or lender’s financial requirements. You calculate it based on your loan amount and could go from 1% up to 4%.
You pay for the LMI if you borrow over 80% of the value of your property. Hence, you must remember not to borrow higher than 80%.