What LMI is and when it applies
Moneysmart's glossary says LMI protects a credit provider if borrowers cannot repay, does not benefit the borrower, and is usually a one-off cost to the borrower. It says the insurance applies when the amount borrowed exceeds 80% of the value of the property. (That glossary entry was last updated in 2019.)
QBE says LMI is required by lenders when borrowers have a lower deposit, usually less than 20% of the property's value, and that the lender pays the premium to the insurer when the loan starts. Borrowers can pay the fee upfront or add it to the loan. Helia gives the same two options, called paying upfront and capitalising.
QBE also says it can seek repayment from the borrower for any shortfall it has covered. That is a reminder that the borrower still owes the debt.
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What it costs
Helia says the fee is typically between 1% and 2% of the loan amount, depending on the size of the deposit and how much is borrowed. QBE says the cost predominantly depends on loan size and loan to value ratio (LVR) rather than borrower characteristics such as employment type, location or credit score.
Worked example. An $800,000 property with a 10% deposit:
- Deposit: 10% x $800,000 = $80,000
- Loan: $800,000 - $80,000 = $720,000 (LVR 90%)
- LMI at 1%: $720,000 x 0.01 = $7,200. At 2%: $720,000 x 0.02 = $14,400
- If added to the loan: $727,200 to $734,400
Helia notes that capitalising the fee increases the loan and the interest paid. To avoid LMI at this price, the 80% LVR line means a $640,000 loan (80% x $800,000) and a $160,000 deposit, which is $80,000 more than in the example. If a lender limited a foreign national to 70%, the loan would be $560,000 (70% x $800,000) and the deposit $240,000, and LMI would not come into it. The deposit guide and the costs guide look at the other cash needed.
The 1% to 2% range is Helia's typical figure, not a quote, and different insurers and lenders price differently.
What insurers and the regulator say about residency
Neither the Helia page nor the QBE page checked says anything about non-residents, expats, foreign nationals or visa holders. QBE lists location among the characteristics that matter less than loan size and LVR for its pricing, but it does not discuss where the borrower lives.
APRA's guide for banks says a prudent lender, when setting risk limits for its home loan book, considers LVR limits, its use of LMI, and special-circumstance loans such as loans to non-residents. The guide also says LMI is not an alternative to a lender's own checks of repayment capacity and the property's value. In practice, that places the decision with the lender. No source reviewed says non-residents cannot get LMI, and none says they can.
What brokers report about loan limits
These are secondary sources and the figures differ.
| Borrower | Reported limit | Source |
|---|---|---|
| Foreign nationals living overseas | LVR often capped at 60% to 70% | Odin Mortgage non-resident page (updated July 2024) |
| Foreign nationals | Lenders in most cases require a deposit of 30% to 40% | Home Loan Experts (updated 21 May 2026) |
| Australian expats on foreign income | Commonly capped lower than 95%, often around 80% | Hunter Galloway |
| Some expats | May borrow up to 95% of the property value, inclusive of LMI | Home Loan Experts |
| Tier 1 currency earners (investment loans) | 95% LVR available from only 2 lenders | Odin Mortgage expat page (updated 2 October 2026) |
Odin's page also says some specialist lenders accept a 10% deposit from high-income applicants paid in Tier 1 currencies, against a 30% deposit at major banks. Since 95% is above the 80% line, a loan at that level is where Moneysmart says LMI applies, but the brokers' pages do not say which insurer or lender is involved. The foreign income guide explains how income is counted, which affects the loan size a lender will assess.
Other things to know
- Refunds. Helia says a partial refund of the fee may be available if the loan is repaid within two years: 40% in the first year and 20% in the second, with eligibility and amounts varying by policy and no refund where repayments are missed.
- Top-ups. Helia says increasing the loan amount can mean a new LMI fee, with credit for the original.
- Visa holders. The temporary residents guide looks at deposits for people living in Australia on a visa.
Questions for a lender or broker
- Does the lender allow a loan above 80% for my residency status and income currency, and what is the maximum?
- Which insurer does the lender use, and what is the estimated fee?
- Can the fee be capitalised, and what does that do to the loan size?
- What is the lender's published position for expats and non-residents? The lender guide covers what lenders publish.
Keep reading
- How lenders assess foreign income for an Australian home loan
- Which lenders lend to Australian expats and non-residents?
- How much deposit do you need for a home loan as a temporary resident?
- Stamp duty for expats and non-residents buying in Australia
- Sending money to Australia for a property deposit
- Australian credit score and credit file for expats and new arrivals
Frequently asked questions
Can a non-resident get lenders mortgage insurance?
The insurer pages reviewed do not say. Helia and QBE describe the product without mentioning residency. Whether a lender offers a loan above 80% to a non-resident is the lender's policy, and brokers report that limits for foreign nationals are often lower than for expats.
Who pays for LMI?
Moneysmart says it is usually a one-off cost to the borrower. QBE says the lender pays the insurer, and that borrowers can pay the fee upfront or capitalise it into the loan. In practice the cost falls on the borrower either way.
How much does LMI cost?
Helia says typically 1% to 2% of the loan amount, depending on deposit size and borrowing. QBE says the cost depends mainly on loan size and LVR. On a $720,000 loan, 1% to 2% is $7,200 to $14,400.
Does LMI protect me if I cannot repay?
No. Moneysmart says LMI does not benefit the borrower and only protects the lender, and QBE says it can seek repayment from the borrower for any shortfall it covers. Helia says borrowers in financial hardship should contact their lender early.
Can I avoid LMI?
Moneysmart says it applies when borrowing exceeds 80% of the property's value, so a loan at or below that line does not need it. Brokers say foreign nationals usually face lower limits anyway, with deposits of 30% to 40%.
Sources
- Lenders mortgage insurance (LMI), Moneysmart glossary (ASIC)
- Understanding LMI, QBE
- Lenders Mortgage Insurance (LMI), Helia
- Prudential Practice Guide APG 223 Residential Mortgage Lending, APRA
- Non-resident mortgages, Home Loan Experts (broker, secondary source)
- Australian expat home loans, Hunter Galloway (broker, secondary source)
- Australian expat mortgages, Odin Mortgage (broker, secondary source)
- Non-resident home loans, Odin Mortgage (broker, secondary source)
Checked 7 October 2026.
Expat Finance is an independent guide. It is not a lender, mortgage broker or credit provider, it does not hold an Australian credit licence, and it does not give credit, legal, tax or migration advice. It is not affiliated with any bank, the ATO or the Foreign Investment Review Board. General information only, not legal, tax, migration or financial advice.