Hi ppl,
I have searched all over the web and in this forum for a ‘rough’ formula you can use to calculate LMI for LVR>80%. Does anyone use an approximate formula?
Any help would be appreciated
-Nick
walkernick
I am a broker, but not in the office at the moment, so will try to dig out the info for you on Tues.
There are 2 different insurers-each with different rates, and then it differs whether it is onwer occup or investment. It is also a sliding scale-as the LVR goes up so does the percentage. And, some banks even mark up what they are charged from the insurers so it can vary from bank to bank.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Nick,
Terry is spot on!!! The premium that you pay for LMI is a scale from 80.01% to 97% +. LMI is calculated as a percentage of the loan amount. So the premium that you pay is relatively cheap in the low 80%s[
] and can be very epensive at 97%!!.[] Obviously more risk to the insurer as your deposit decreases.There is also a difference if the lender you are using is a securitised lender or a balance sheet lender. Won’t go into the definitions here. LMI premiums are also reveiwed every 6 months or whenever the LMI market changes (Royal Sun Alliance has recently been down graded and has droppped off the shopping list leaving PMI and GE as the only alternatives.
To give you a guide, I have seen premiums at around 0.21% plus stamp duty at 80.01% loan to value ratio to 3% plus stamp duty at 97% loan to value ratio.
Cheers and happy investing. May you LMI be cheap!
Nathan.
Hey Nathan, Terry and Michael,
Thank you for replying, it’s really appreciated.
Just to clarify – when you talk about the percentage premiums, are these percentages on the entire mortage amount – or just on the amount that exceeds 80% LVR?
Terry, I look forward to hearing from you on Tuesday. My email is [email protected] if that is more convenient.
Thanks
-NickIt’s based on the entire loan amount..
Regards
Hi Nick
Here is a rough guide on LMI rates:
LVR Up to $300,000 $300,001 to $500,000 Greater than $500,000
0 to 80 0.35 0.45 0.69
80.01 to 81 0.46 0.58 0.9
81.01 to 82 0.48 0.6 0.93
82.01 to 83 0.61 0.78 1.22
83.01 to 84 0.66 0.84 1.32
84.01 to 85 0.78 1 1.56
85.01 to 86 0.85 1.09 1.7
86.01 to 87 0.93 1.19 1.86
87.01 to 88 1 1.27 1.97
88.01 to 89 1.09 1.4 2.19
89.01 to 90 1.19 1.49 2.38
90.01 to 91 1.32 1.69 2.63
91.01 to 92 1.37 1.76 2.73
92.01 to 93 1.47 1.85 2.92
93.01 to 94 1.59 2.04 3.16
94.01 to 95 1.68 2.16 3.33Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hey Terry
You legend! People like you make this forum so great
Thanks
-NickHi Nick
Anytime you need to calculate purchase costs, LMI, stamp duty, etc just get on one of the bank websites and it will calculate all the purchase costs for you. The ANZ site is pretty quick to use, but they all have calculators.
Cheers[]***************
Tracey Imbuldeniya – Finance Consultant
Ph: 0401 674464
Email:[email protected]
] Obviously more risk to the insurer as your deposit decreases.
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