LMI again if accessing equity on 90% loan

Hi all,

I have a 90% loan on my IP and I want to access some equity. Do I have to pay LMI again?

Ben

 

Yep

If you stick with your existing lender then it won't be a whole new LMI charge. It will just be a small adjustment fee to your existing LMI premium.

Cheers

Jamie

 

In most cases you shouldn't have to pay the full LMI, you'll have to pay LMI on the increase.

 

As Jamie said above, only an adjustment fee in most cases.

Trickier part is releasing the equity in LMI territory - its not as simple as making a purchase at LMI where the loan purpose is clear, some lenders make this more difficult than others.

 

Heya Guys,
When you say a small LMI adjustment fee, how much is this amount typically?
Meaning the new LMI premium would be well below what you originally paid but just want a few $$ again above 80%.

Cheers

 

Roughly work out full lmi on new loan and deduct what you had already paid. Rough guide.

 

The minimum fee is $600 I think. Your broker can give you an estimate but it's generally calculated at the new loan amount (so maybe 1 or 2% of the total loans amount) less what was originally paid. Not including stamp duty.

 

O.K Cool.
So if you originally paid say 10k and you wanted to access equity and the premium was say 3k then your 7k ahead but regardless you would still need to pay about $600?

 

Yes, but it'd be hard to find that sort of example, as lmi rates have been increasing usually the new lmi would be higher than what was originally paid.
It's also worth noting that if there's been a change from ppor to ip use of the funds the lmi rates are higher. Some lenders pass on a fhb discount, which isn't available for top ups. Also the purpose of the loan can determine the premium charged. Debt consolidation is more expensive than reno or deposit for investment etc.

 

Hi all,

Does NAB allow equity release for an IP loan with LVR 90%? I have been told that it is almost impossible for investment loan now. Only PPOR.

Thanks.

 

Thanks Rolf.

I have a 3y fixed P&I investment loan with NAB with 2y remaining at 90% LVR. The property value has risen around 15% in the past year (according to NAB valuation). I want to access the equity and am willing to pay the additional LMI (new lending LMI - original lending LMI) but my broker said it is almost impossible since NAB does not allow equity release at 90% LVR for investment loan now. My servicing is still adequate.

 

I want to get it out to fund part of the cost of a recent purchase which will be mortgaged with another lender (settle in 30 days). I have enough fund to do it but want to use the potential equity to do so and keep the existing fund for other purposes.

 

Loan with the other lender has been approved unconditionally.