Not sure I understand exactly how this works Richard.

I have not paid any LMI at this stage as I haven't signed the construction contract yet. 

When I purchased the land I put down a 36% deposit but now that the construction costs are factored into it that 36% has turned into a 9.9%dep.

I am looking to increase the cost of the build to increase the final value and hopefully the LVR will fall back down to 89%. Is this the way you'd recommend?

Will more than likely come to you next time I'm building or refinancing as you are local to me.

Thanks all.

It is very unfortunate that an insurer can manipulate a value to influence the premium. Obviously the land has already been purchased so they know I have no option other than to proceed and pay the premium.

I have just bypassed the broker and called the lender directly and they've told me that the value of the land and the build is done at a 'recovery value' as opposed to market value. When I asked to see in black and white how the formula for the recovery value I was told that it is 'commercially sensitive' information.  Seems they win either way.

Having said that, they do agree that it should never have been valued at the higher rate and then re-valued at the purchase price, nor should the construction costs have been reduced. They have agreed to look into it.

In this instance the recovery rate must be around 9% less than market value. I would assume that each lender or Insurer have their own way of calculating value?

Is there any point in me making a complaint to the financial regulator, ie the ombudsman or would I be wasting my time?

Thanks again