5% deposit or 10% deposit

I'm torn choosing between my finance options from my broker.

$500k purchase with 10% deposit no lmi due to profession with big 4 bank

or

$500k purchase with 5% deposit with lmi from non bank lenders

Trying to save my equity of $130k to be able to purchase 2x properties this year.

If i'll go with 10%, total deposit plus purchase costs will be around $80k but with with 5%, total funds required is only $60k and I will be able to purchase another property at maybe around $400k.

Which one would you go? LVR with 10% will be 90% but LVR with 5% will be 92.5% due to LMI.

I'm wondering if it's better to go with 10% with the big 4 and keep the extra equity as buffer and buy the next one until i save $80k or access more equity.
Also, with the 10%, my deposit is $50k rather than with 5%, my deposit is only $25k and $20k is LMI.

What would you do?

 

Whats the LMI $20k?
does that mean you pay $20k to put down $25k less deposit

Will the LMI be deductible to you?

 

Really depends on how active youre going to look for with the second property, also is the second property in a high growth area ?

If there's no big growth in the area then I don't see a rush in buying there and would rather go 10% with no LMI and save up.

 

the LMI of $20k will be if I choose with the 5% deposit.

Correct, will have to pay $20k to put down 25k deposit

I'm not sure about the deductibility of LMI though.

Between the 2 options, the only difference is around $10k as the lender will bring down the borrowing amount to cover the LMI

So my broker said for option 1 with 10% i can borrow $450k but with option 2 with 5%, i can only borrow $455k because of the $20k lmi.
hmmm seems like the borrowing amount is about the same, the only difference is i have lesser deposit on the 5%, now I'm confused... guess need to talk to my broker again.

 

If you don't mind me asking, is this a Medico policy for the No LMI?
If so, there's a Big 4 bank offering up to 95% LVR with no LMI for Medical Professionals

 

Sorry no, I'm a CPA and work as a financial analyst. Is there anything similar for CPAs?

 

The difference between a 10% deposit and a 5% deposit is like borrowing $2 to pay back $1 in LMI.

You also get significantly more expensive rates with a 95% lend, far fewer borrowing options and you're that much further behind the starting line (which is really at 80%).