Deposit vs LMI Trade-off Calculator
Compare saving a bigger deposit against paying lenders mortgage insurance sooner, weighing the estimated LMI cost against extra time saving.
Your results
Calculation breakdown
- Estimated LMI
- loan amount × LMI premium rate
- Months to 20% deposit
- (20% of property value − current deposit) ÷ monthly savings
Worked example
On a $650,000 property with a $65,000 deposit, an estimated 2% LMI premium costs about $11,700, versus roughly 33 more months of saving to reach a 20% deposit at $2,000 a month.
Assumptions
- LMI premium rates vary greatly by lender, loan size and loan-to-value ratio; use a quoted estimate for accuracy.
- Does not model potential property price growth while you keep saving, which can offset or outweigh the LMI cost.
How this calculator works
This calculator compares the estimated cost of lenders mortgage insurance at your current deposit against the extra months needed to save a larger deposit that avoids or reduces it, helping you weigh entering the market sooner against the LMI premium.
Frequently asked questions
At what deposit level does LMI usually apply?
Lenders commonly require LMI when the deposit is below 20% of the property value, though the exact loan-to-value threshold and premium are set individually by each lender and insurer.
Is the LMI premium entered here exact?
No, LMI premiums vary by lender, loan size and loan-to-value ratio; enter a quoted or estimated premium rate as a percentage of the loan amount for a more accurate result.
Does paying LMI ever make financial sense?
It can, particularly if property prices are rising quickly, since entering the market sooner may outweigh the cost of the premium; this calculator only compares the savings timeline and premium cost, not future price growth.
Results are estimates only and are not financial, tax, legal or credit advice.