LMI Refund??

LMI = Lenders Morgage Insurance

This is insurance the banks take out to pay off their lose should you default on your mortgage payments. The LMI pays the extra if the bank sells your house and they are still out of pocket. You don’t see money from LMI ever.

If your LVR is over 80% or you are doing a low/no doc you are often asked to pay for the LMI. Otherwise the banks pay (if they take it) and you don’t really hear about it. Some people make the mistake of thinking if they are not asked to pay LMI then there is none on their mortgage, but this isn’t always the case. Also of note – some banks have a big enough portfolio that they choose to self insure (things average out and it’s cheaper NOT to get insurance). I think CBA does this.

Regarding refunds – I found one mention on an Australian website – http://www.gemico.com.au/lmi_whatis.htm

* Mentions that a partial refund may be available if you pay back the loan within 2 years. Sorry that doesn’t relaly help.

I’d contact your insurer directly and see what they say.

Cheers!
Sheryl Duruz
[email protected]