Mortgage insurance
There are two types of mortgage insurance in
Australia: Lender’s Mortgage Insurance (LMI) and Mortgage
Protection Insurance.
LMI enables you to get a mortgage with a smaller deposit than the
usual 20 per cent of the value of the loan. The amount of insurance
you pay depends on factors such as the size of your loan, the
amount of your deposit, and the risk that the lender thinks you
present to them. The insurance protects the lender rather than the
borrower, if the loan cannot be paid. Any payment is made to the
lender, not the borrower.
Mortgage Protection Insurance assists you or your family to
continue paying your mortgage if you become seriously ill,
disabled, unemployed, or die. Payments are made as a lump sum to
you or your family.
