Is LMI based on a percentage or different to each lender?
I have borrowed 95% of $400k and the LMI is $8.8k………….is this about right based on the above??
LMI is based on % and is different for each lender. Significantly different in fact.
I think you could have got it cheaper.
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker BrisbaneRough figures? It does seem on the expensive side…with ANZ btw..
if your figure didn’t include stamp duty, around $1300 difference.
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker BrisbaneBefore focusing on the cost of LMI, a lot of other things have to be considered. Look at your interest rate for example. You might find that your LMI premium was a little on the high side compared to other lenders but your interest rate was on the low side.
I for one would rather pay a higher LMI premium as a once of payment today instead of a higher interest rate that will cost me more every month for the next 30 years.
You will also find that lenders who only use one mortgage insurer can offer cheaper rates as a result of their exclusivity agreements. There are only two main insurers – Genworth and PMI. Check out http://www.mortgagepackaging.com.au/index_files/mortgage_insurance.htm
There are links to the two main mortgage insurers if you want to know more.
Robert Bou-Hamdan
Mortgage AdviserOn 95% loans, it is roughly 2% of the loan balance. Maybe a bit more if the LMI is added to the loan.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
as Rob has said, other factors apply to any finance application.
the original question from uforia was concise – refering to mortgage insurance only.
get it??
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker BrisbaneLmi premiums also differ between Owner occupied loans & Investment Loans, P & I Loans & interest only loans, Non-Genuine savings & Genuine Savings and there can be different rates again if you are are a First home buyer . Gemico is normally cheaper then PMI and Gemico is normally the preferred insurer because of the difference in premiums. Gemico is normally a bit easier for approvals also.
Example $400,000- Loan 95% premiums for 2 different lenders for
PMI
Owner Occupied Investment
Lender 1 2.28% 2.85%Lender 2 2.56% 3.00%
Gemico
Owner Occupied Investment
Lender 1 2.11% 2.64%
Lender 2 2.43% 3.03%
State Stamp Duties Payable for LMI:
NSW = 0%
VIC,ACT, WA & NT = 10%
SA = 11%
TAS = 8%
QLD = 8.5% Investment
QLD = 5% First PurchaseState Manager
Wholesale Mortgage Lender that deals only with brokers.
20 years in Finance Industry
tks naba
correct me if i’m wrong, but thats only indicative of your panel lenders. not mine.
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker BrisbaneI’ve just done an example of 2 different lenders, just to show that there are differences in premiums between lenders.
State Manager
Wholesale Mortgage Lender that deals only with brokers.
20 years in Finance Industry
Originally posted by brahms:as Rob has said, other factors apply to any finance application.
the original question from uforia was concise – refering to mortgage insurance only.
get it??
Brahms, I must sincerely apologise for trying to provide a more complete and comprehensive response which incorporated responses to points made by some of the other posters.
You seem to be annoyed by this as I don’t know exactly how to take your comments – especially the “get it???” thing you do.
I just thought that readers of the forum would appreciate more than a single line restricted response.
Robert Bou-Hamdan
Mortgage AdviserThanks guys, looks like i’ve been charged about 2.3%, which seems reasonable now….just got abit of a shock seeing $8800 at first …
uforia,
I hope you don’t mind if I ask a question… the 9k you are paying extra for your property… areyou counting on making this 9k up as profit in some other way? Because otherwise you might be moving into negative equity if property values remain flat. I am assuming you would be thinking of some creative deal to get the LMI back?
I know people have used LMI successfully before and during the boom… but I think now it would bwe used with far greater caution given the flatter market.
Hope you don’t find my query intrusive
kay henry
This is my first property, and within Sydney….therefor def negatively geared
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