What do LVR and LMI mean?
LVR is your loan as a share of the home's value, and LMI is a one-off insurance that is usually charged when that share goes over 80%.
LMI protects the lender, not you, so a bigger deposit can save you a cost you get nothing back from.
The rule
- LVR is the loan as a percentage of the value of the asset it buys. It is the loan divided by the value. A $450,000 loan on a $600,000 house is an LVR of 75%.
- Lenders mortgage insurance protects a credit provider if borrowers cannot repay. It is usually a one-off cost, payable when the amount borrowed is more than 80% of the value of the property. It does not benefit the borrower.
- We do not estimate what LMI costs. We found no price table from an insurer or lender that we could open, so the lender's own quote is the figure that counts, and the lender decides.
- The 5% Deposit Scheme: from 1 October 2025 there are no income caps, no waiting lists and no LMI, with a minimum deposit of 5% (2% for single parents or legal guardians). You apply through a participating lender, which decides.
- Help to Buy removes the need to pay LMI. It needs a minimum 2% deposit, and the lender and Housing Australia decide who joins.
- If you stop meeting the 5% Deposit Scheme's ongoing obligations, such as living in the home, the guarantee may no longer apply and the lender may require LMI or other costs.
What people ask
What is LVR?
It is the loan divided by the value of the home, as a percentage. $450,000 on a $600,000 home is 75%.
What is lenders mortgage insurance and who does it protect?
It is insurance that protects the lender if you cannot repay. It is usually a one-off cost when you borrow more than 80% of the value. It does not benefit you.
How much is LMI?
We cannot give a fair figure. The lender's quote is the number to use, so enter it in the model above and compare it with the deposit you would need to reach 80%.
How do I avoid LMI?
LMI is usually charged when you borrow more than 80% of the value, so a deposit of 20% of the price puts you on the line. The 5% Deposit Scheme and Help to Buy are two government schemes that say you do not pay LMI. The lender decides whether you can use them.
Can LVR go up if house prices fall?
Yes. The loan stays the same while the value falls, so the ratio rises. A lender also uses its own valuation, which can differ from the price you paid.