Lenders Mortgage Insurance Calculator Input your mortgage details and calculate the total cost of the mortgage insurance Home Loan Balance: Interest Rate: Loan Term: Loan Option: Principal & Interest Interest Only Use Lenders Mortgage Insurance: Yes No Total Mortgage Cost: function calculateCost() { // Get the user inputs const hloan = document.getElementById('hloan').value; const intrate = document.getElementById('intrate').value; const term = document.getElementById('term').value; const option = document.getElementById('option').value; const insurance = document.getElementById('insurance').value; // Calculate the total cost let totalCost; if (insurance === '1') { // Calculate cost of Lenders Mortgage Insurance let lmiRate; switch (option) { case '1': lmiRate = hloan * 0.1 / 100; break; case '2': lmiRate = hloan * 0.2 / 100; break; } totalCost = (hloan * intrate * term) + lmiRate; } else { totalCost = hloan * intrate * term; } // Display the result document.getElementById('totalcost').value = totalCost; } What Is Lenders Mortgage Insurance (LMI) When you apply to borrow money to purchase a property, most lenders will require you to have lenders mortgage insurance or LMI. LMI is an insurance policy taken out by the lender that ensures them in the event the borrower fails to make repayments, they can be protected against the outstanding loan amount. This is particularly important if the borrower pays a deposit of less than 20% of the purchase price, as the lender must be assured they will be able to recover their money if the loan is not repaid in full. Lenders mortgage insurance usually form part of the loan establishment fee. In essence, the lender takes out an insurance policy against your loan, which pays them out if you, the borrower, are unable to repay the loan in full. As the benefit of the policy lies with the lender, they usually require the borrower to pay for it. LMI Costs The premiums charged for lenders mortgage insurance can vary depending on the lender you're borrowing from and the amount of deposit you pay. Higher deposits result in lower premiums, as the lender is taking less risk in lending the money. In addition, interest rates, the size of the loan and the specific nature of the lender you're borrowing from can all have an impact on the LMI cost. In most cases, your lender will require you to pay the lenders mortgage insurance premium up front. This will typically be included in the loan setup fees. Alternatively, some lenders may allow the premium to be rolled into the loan, however, monthly payments may attract additional interest payments. LMI calculators If you're looking to understand how much LMI will cost you on your loan, most lenders offer LMI calculators on their website. The calculator will usually provide you with an estimate of your LMI premiums based on the criteria you've entered. Whilst LMI calculators provide a helpful guide, it is important to remember that the cost of LMI may vary depending on the circumstances. It is best to always contact your lender to confirm the exact cost of the LMI based on your particular loan application. In addition, some lenders may have special discounts or packages available for certain types of loans. Be sure to always ask your lender if they have any promotional packages or discounts available on LMI. What Other Insurance Should You Consider? In addition to LMI, it's important to consider other areas of insurance that may be beneficial for protecting your property and your financial future. Some other types of insurance to consider include: Life insurance - to cover the costs associated with a death. Income Protection Insurance - to cover you in the event of loss of income. Property Insurance - to cover the costs of repairs or replacement in the event of damage to the property. Whilst LMI can be an expensive part of a home loan, it is important to remember it is for the benefit of the lender and should not be overlooked. It can be a valuable asset in helping to provide the security needed by the lender when taking on a loan. In Conclusion When applying for a loan, understanding and budgeting for your LMI costs is an essential part of the loan application. Most lenders provide a LMI calculator tool that can provide a good estimate of what your premiums may cost. It is best to always contact your lender to confirm the exact cost of the LMI based on your particular loan application. In addition, it is also important to consider other insurance products to provide additional security for your property and your financial future.