How Much Is LMI on a $600k Loan With a 10% Deposit?
Published 31 May 2026
The short answer
On a $600,000 loan with a 10% deposit, which is a 90% loan-to-value ratio (LVR), lenders mortgage insurance (LMI) is typically around $10,000 to $12,000 as a one-off premium. True Loan's estimate for this exact case is roughly $10,740 (about 1.79% of the loan). The precise figure depends on your lender and the insurer (Helia or QBE), and the premium drops to zero once your LVR is 80% or below.
What LMI is and why it applies here
Lenders mortgage insurance protects the lender, not you, if you can't repay and the property sells for less than the loan balance. Lenders generally require it whenever you borrow more than 80% of the property's value, i.e. a deposit under 20%.
A 10% deposit means you're borrowing 90% of the value, so LMI applies. The premium isn't a flat rate. Insurers price it off two things working together: the size of the loan and how high the LVR is. The higher the LVR and the bigger the loan, the larger the premium, because the lender's risk if you default is greater. It's a one-off cost, usually paid at settlement, and it covers the lender for the life of the loan.
A key point that trips people up: a "$600,000 loan with a 10% deposit" means the loan itself is $600,000 and the property is worth about $666,667 (the loan is 90% of the value, the deposit is the other 10%, roughly $66,667). That's different from a $600,000 property, where a 10% deposit would leave a $540,000 loan.
Worked example (matching True Loan's logic)
True Loan estimates LMI from a premium-rate matrix indexed by loan-size band and LVR band, the same shape insurers use.
| Input | Value |
|---|---|
| Loan amount | $600,000 |
| Property value | ~$666,667 |
| Deposit (10%) | ~$66,667 |
| LVR | 90% |
| Loan-size band | ≤ $600k |
| LVR band | ≤ 90% |
| Premium rate | 1.79% |
| Estimated LMI | ≈ $10,740 |
The maths is checkable: $600,000 × 1.79% ≈ $10,740.
Because LMI sits in a "band", small changes in deposit can shift the rate. Lifting the deposit from 10% to 12% (an 88% LVR) drops the rate into a lower band, closer to ~1.3% on a loan this size, or roughly $7,800. Getting to a 20% deposit removes LMI entirely. This is why even a modest extra deposit can save thousands.
You then choose how to pay it:
- Upfront at settlement. This adds ~$10,740 to the cash you need on the day, alongside your deposit, stamp duty, conveyancing and registration fees.
- Capitalised into the loan. LMI is added on top of the $600,000, so your loan becomes ~$610,740 and you pay interest on it over the term. At, say, 6.0% over 30 years, that capitalised $10,740 costs noticeably more than the upfront figure across the life of the loan.
Model this in True Loan
Open the True Loan calculator and set:
- Loan amount to $600,000 and property value to ~$666,667 (so the LVR reads 90%). The Upfront Costs panel shows the LMI estimate instantly, dropping to zero if you push the deposit to 20%.
- Toggle "capitalise LMI" on and off to see the difference between paying it upfront versus rolling it into the loan and watching the extra interest accumulate over 30 years.
- Add your state's stamp/transfer duty and any first-home-buyer concession, plus registration and conveyancing, to see total funds required at settlement.
Want to compare a 10% deposit against a 20% deposit (no LMI) side by side? Use the comparison tool; every scenario is shareable via its URL.
For deeper dives, see how much deposit you need to avoid LMI, how LMI is calculated across LVR bands, and whether to pay LMI upfront or capitalise it.
Common questions and mistakes
Can I avoid LMI with a 10% deposit? Sometimes. Eligible first home buyers can use the First Home Guarantee; from 1 October 2025 it has no income test, no place limit, and higher price caps, and lets you buy with as little as a 5% deposit with no LMI because the government guarantees the gap. A guarantor (family equity) arrangement can also remove it.
Is LMI refundable if I sell early? Generally no. It's a one-off premium that covers the lender for the life of the loan, not a policy you can claim back.
Does LMI protect me? No. It protects the lender. If the property is sold short after a default, you can still owe the shortfall, now to the insurer rather than the lender.
Is the True Loan figure an exact quote? No. It's an indicative estimate. Insurers set real premiums, and they vary by lender, postcode, property type and whether GST/state duty applies on the premium itself. Always confirm with your lender.
Figures here are estimates for the 2025-26 financial year and may differ from your lender's actual quote. Check official sources such as moneysmart.gov.au, your state revenue office and the ATO. This is general information, not financial or credit advice.
This guide is general information and estimates only — not financial or credit advice. Figures vary by lender and circumstances; always confirm with official sources.