Lenders Mortgage Insurance (LMI) is typically required when LVR exceeds what percentage?

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Multiple Choice

Lenders Mortgage Insurance (LMI) is typically required when LVR exceeds what percentage?

Lenders Mortgage Insurance is there to protect the lender when the borrower has relatively little equity in the property. It is typically required when the loan amount exceeds 80% of the property's value, meaning the borrower has less than a 20% deposit. The reason is that a higher loan-to-value ratio increases the lender's risk if the borrower defaults, and LMI compensates the lender for that risk. In practice, smaller deposits (LVR above 80%) usually trigger LMI, while deposits that bring LVR to 80% or below often avoid LMI, though lender policies can vary. So the percentage threshold is 80%.

Lenders Mortgage Insurance is there to protect the lender when the borrower has relatively little equity in the property. It is typically required when the loan amount exceeds 80% of the property's value, meaning the borrower has less than a 20% deposit. The reason is that a higher loan-to-value ratio increases the lender's risk if the borrower defaults, and LMI compensates the lender for that risk. In practice, smaller deposits (LVR above 80%) usually trigger LMI, while deposits that bring LVR to 80% or below often avoid LMI, though lender policies can vary. So the percentage threshold is 80%.

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