LMI Cap and LVR reqs

Hi All,

Question for the brokers (and those in finance).

If I put down enough deposit to land around 90 % LVR on a PPOR P&I loan, do you think the banks (at the moment) are in the mood to cap the LMI in on the loan?

The LMI when capped in takes the LVR to about 92 %.

I remember years ago, just about every bank capped LMI all day every day without question. Recently, I saw NAB offer 33% LMI discounts.


Thanks.

 

some allow this

 

Generally for PPOR loans, this will fall below max LVRs for most lenders - so its OK. Will depend partly on loan size too.
NAB are offering discounted LMI for FHBs, ending 26 June though - will need app submitted Monday/Tuesday to get in on time.

 

Most banks will go up to 95% capped LMI on PPOR.

Depending on which bank, they will look at your employment history.

 

I’m also interested in capped LMI. Just so I understand better, if the bank says we can only borrow max $800,000 and I have $150,000 in savings and the house costs $950,000 I wouldn’t be able to add LMI to the loan (making the loan $813,000) as it’s now over my max borrowing limit?
We are now currently savings to cover the stamp duty component. Thanks.

 

Hey Kozy,

Yes that's the confusing part at times if the banker don't explain this stuff properly.

If your max loan is $800k then that will include mortgage insurance they won't cap the additional LMI on top of your max loan if you're unable to service the loan on paper.

 

Easy to understand that.
Appreciate your reply.

 

So banks seem happy to cap it, do they cap Stamp too?

 

what is 'stamp'?
Stamp duty on the LMI = yes
Stamp duty on the transfer of land = only within the LVR limits.

 

Stamp on property transfer. Seems they will cap in more than I thought.

I read QBEs LMI policy, 95 % LVR fully inclusive seems to be pretty common.

 

It will be a PPOR for at least 10 years. I’m planing to put about 10 % down and cap the LMI (take LVR to 91-92%) but pay the stamp and entry other costs. I was curious though about the stamp capping.

I think I understand what you mean, if you caped in stamp they charge the LMI on the base value + the stamp included, which pushes the LMI premium up (as it erodes the deposit) , is that what you meant?