How to save on lender’s mortgage insurance?
Lender's mortgage insurance or LMI is paid when you borrow more than 80% of the property price. It is a one-off insurance premium that insures the lender's risk in case a borrower defaults on their loan repayments. The LMI amount varies depending on the loan amount and also from lender to lender. Generally, if you do not want to pay mortgage insurance, you need to borrow less than 80% and have the 20% deposit plus costs available. However, this is not the most suitable option for most of us as it can take a long time to save the deposit. The trick to save money on lender's mortgage insurance is then for you to consider this as a factor when you are choosing your lender. Most people are not aware that different lenders charge different LMI premiums and usually choose a lender based only on a low interest rate. You can save thousands when you choose a lender whose LMI premium is lower than another bank. There are also some lenders who will let you borrow up to 85% without having to pay
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