The process of buying a new home is often associated with unexpected fees and buying costs you may not be prepared for. One such fee involves paying for lenders mortgage insurance.

If you are buying a property and have less than a 20 per cent deposit, you may be required to pay Lender’s Mortgage Insurance.

What is the purpose of lenders mortgage insurance?

Lenders mortgage insurance protects your lender if you fail to pay your home loan and the property has to be sold.

It is important to note that the money raised does not cover the loan (it is not life insurance)

What is the cost?

Lenders mortgage insurance is a one-off fee that is calculated on a sliding scale. Depending on the loan amount and ratio, it can be expensive.

This rate often differs with the amount you are borrowing, as well as the lender you are working with and the type of financial product you have chosen. This fee can be paid upfront or it can be added onto the loan amount.

Who do I ask about lenders mortgage insurance?

A Trusted Mortgage Brokeris the best person to speak to about mortgage insurance. With comprehensive knowledge of different lender requirements and borrowing criteria, they are well-placed to give you relevant and up-to-date information.

A Trusted Mortgage Brokeris able to provide the specifics on all of these different types of scenarios and offer targeted advice for your personal situation.

The value of a large deposit

If you would like to avoid paying lenders mortgage insurance all together, you may want to seek advice about budgeting towards a bigger deposit.

The more you have to put towards a down payment on your property, the more options you have in terms of securing a favourable lending agreement.

Trusted Mortgage Broker has a great range of mortgage calculators to help with all those tough decisions that come with finding the right loan. Have a look at our calculators on our website to help you further. www.trustedmortgagebroker.com.au/calculators/

About the Author

Sue Hayter

Sue's service commitment is fantastic. At Trusted Mortgage Broker we work with our clients to ensure they understand their options, know exactly how much they can borrow and ensure they choose the right home loan and the right lender that is not unsuitable to their individual needs.

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