Pay LMI now, or wait and save more deposit?
The question every borrower with a sub-20% deposit asks. The honest answer is half maths, half life timing — and most LMI calculators only show you the premium, not the trade-off.
- Models the actual decision, not just the premium. Rent paid + property growth foregone + LMI all in one number.
- Helia base premiums — the dominant Australian LMI insurer, used (with uplifts) by most lenders.
- 5-year cost timeline. See the cheapest month to buy, the break-even point, and the recommendation with reasoning.
- Methodology open: how the calculation works.
Estimate only. LMI premiums are Helia base rates; lender uplifts (0–15%) and state stamp duty on premium (5–10%) are not modeled. Property growth is a working assumption, not a forecast.
Want to know your max borrowable instead? Use the borrowing capacity calculator →
Your headline result
When LMI makes financial sense
Most calculators frame Lenders Mortgage Insurance as a fee to avoid. That framing is wrong roughly half the time. LMI is the price of buying earlier. Whether it's worth it depends on three numbers most people don't bother running:
- What you'd pay in rent while you save the extra deposit. On the Gold Coast, a family-friendly rental at $750/week is $39,000 a year — gone.
- What the property would do in the time it takes you to save. The 10-year Australian capital-city growth average is roughly 6% per year. A $750,000 property that runs at trend grows by $45,000 in year one alone.
- The LMI premium itself. At 90% LVR on a $675,000 loan, Helia base premium runs around $14,000–$16,000 (before lender uplifts and state stamp duty on the premium).
Add the first two and compare against the third. The break-even is rarely "after several years." For most Gold Coast and South-East Queensland buyers in a rising market, the maths flips inside 18 to 30 months.
The calculator above runs your specific numbers, but the rule of thumb worth remembering: if you'd otherwise be renting in a market with 4%+ annual growth, LMI is usually a one-off entry cost, not dead money.
When waiting actually wins
Waiting is the right call when:
- Your savings rate is fast relative to property growth. If your household saves $80k a year and you're buying in a flat market doing 1–2% growth, the deposit catches up faster than the property runs away.
- You'd be paying rent that's well below the equivalent mortgage. A $400/week share-house while saving 25% on a $1.2M target is structurally different from $750/week renting your own place near the same target.
- Your income is about to step up significantly. Six months from a partner-track promotion, finishing a degree, exiting a probation period — waiting until the higher income shows on payslips often unlocks better lender choice plus a stronger deposit.
- The market you're buying in is genuinely cooling. Not "the news says rates are doing X." Cooling in your specific suburb, on properties of the type and size you'd buy, on data 6–12 months long.
The honest broker take: in a flat or falling market, the LMI break-even can stretch beyond 5 years. At that point, you're paying for psychological certainty more than financial benefit, and the calculator will tell you so.
What this calculator doesn't model
The calculator uses Helia base premium tables and standard interest assumptions. It deliberately does not model the following — these are file-specific factors that affect the real-world LMI cost on your deal:
- Lender LMI uplifts. Different lenders apply uplift factors of 0% to 15% on top of Helia base. ANZ and CBA tend to sit closer to base; some non-banks add a meaningful margin. The right lender choice can save several thousand dollars on the same risk.
- State stamp duty on the LMI premium. Five to 10% added on the premium itself, varies by state. Queensland is on the lower end.
- Discounted-LMI products and waivers. Several lenders offer LMI waiver or discounted LMI for specific professions (medical, legal, accounting) at 90%–95% LVR. If you qualify, the break-even calculation flips dramatically.
- The deposit-bond and First Home Guarantee alternatives. A FHG-eligible buyer pays no LMI on a 5% deposit. We check eligibility against the current scheme price caps before we recommend the LMI route.
- Capitalising LMI vs paying upfront. Most lenders let you add the LMI to the loan; some don't. Cash-flow implications matter and the calculator above doesn't surface them.
- Your actual borrowing capacity. A 90% LVR loan you can't service is a different problem to solve. The borrowing capacity calculator handles that side.
When we sit down together, these are the things we layer on top of the calculator's output to land on a deal-binding number.
Bottom line
The "should I pay LMI?" question is one of the cleaner financial decisions a sub-20%-deposit borrower has to make — but only once you put rent and growth into the same picture as the premium. The calculator does that part. The rest is your specific lender, profession, scheme eligibility, and timing — which is what the broker conversation is for.