supersonic4

Hi ,well we have just been in to apply for a loan, not got a house in mind but I am shocked by the large amout of money you have to pay for lender insurance if you don't have the 20% deposit, on a loan of 380k it is 13k! 330k its 11k,why do they have to charge so much?
I guess theres not way around to get out of paying it ,other than having the money in the first place.
cheers Lorri

Wendy

Wow! That's a lot.

Mine was $3,450 on $225k and I thought that was bad enough

supersonic4

Hi Wendy ,how do they work it out? I think it a lot of money to throw away,but if we wait and save up,the house prices will rise,maybe more than the 13k so if anyone knows why there is such a big difference between our costs I would be interested to why.3k wouldnt be so bad.You wouldnt think it would vary between the states.
Cheers Lorri

Wendy

I have no idea how they work it out, seems like they just pick a number out of thin air

Who was that with? I have mine with the Commonwealth

supersonic4

It is with nab,but its not the banks who charge it ,seems there only a couple of companies that do it for all the lenders so I am not sure why ours is so high.
Cheers Lorri

Wendy

It'll be interesting to see what others have paid. It seems stupid to me that there is such a difference (but then not a lot makes sense out here )

Plug

Apparently there are only two companies that do LMI in Oz, one I know is GE Money, not sure of the other but be careful, if you want to change lenders in the future, you get nothing back with one of them, and only 40% in 1st year and 20% in 2nd year with GE and still have to pay it out again with your new lender.......

We had to pay just over $5K for a $364k mortgage. Try MyRate, they seem to be the best rate at the mo.......but they will still want LMI......

supersonic4

Do you mind me asking ,what % deposit did you have,we have 5%, so maybe this is what does it.
Cheers Lorri

Plug

I think it worked out at about 6%....

You can do an online app with MyRate and they give you an LMI figure (I best get some commission eh!!)

supersonic4

Hey i can't afford to pay yoiur commission since I have to pay the lenders insurance lol. Thanks though will have a look at the site,
Cheers Lorri

Paul and Chloe

Some of the banks (inc St George) do their own LMI and therefore tend to be cheaper....

adriang

I'm in the middle of buying a place, and I spent some time with an independent mortgage adviser going through options and figures.

I got her to put together a spreadsheet of what the costs would be for various amounts vs the amount available for a deposit. I can't give exact figures as they are on my work PC, but there seems to be a scale where the more you can put down as a deposit, the less the insurance will be until you reach the magical 20%. For a 600k mortgage, the difference between the minimum deposit and the 20% was about $600 per month for the entire life of the mortgage (so there is the payment, plus the interest as it is rolled into the loan!).

I ended up jumping through hoops to get the 20%, which means I'm going to live in a place that was decorated by the same person who dresses the wiggles for the next couple of years until I can raise enough to get the place decorated!

smiths

Our deposit was only about 6% and on a loan of $350k we got charged LMI of $6k which we were able to capitalise onto the loan. It turned our loan into a $356k loan but it saved us paying out an extra $6k in cash.

supersonic4

mmm all this make we wonder why ours is so high,I will be asking today.
cheers Lorri

CathnPaul

we recently went to a broker and this insurance wasnt even mentioned, so am really glad that this thread was started as now i can consider it when looking around.

Cheers for that. x