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Do you have to pay lmi again when switching a home loan?

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6 replies to this topic

#1 Mpjp is feral

Posted 19 February 2013 - 06:22 AM

The thread about interest rates made me realise what a high rate we are on. We are going to talk to our bank, but will also approach another to see if we can get a lower rate.
But on our ip we paid lmi, property was only bought last year. If we were to switch banks, would we need to pay again?

#2 GenWhy

Posted 19 February 2013 - 06:27 AM

Yes you do if you want to borrow over 80%.

#3 ~Nic~

Posted 19 February 2013 - 06:41 AM

Yep, agree with PP. If you have less than 20% deposit, you will pay LMI again.

#4 GenWhy

Posted 19 February 2013 - 06:48 AM

Another thing to remember is that mortgage insurers are pretty much calling the shots these days on who banks can provide finance to and they're being extremely picky. The insurance is also way more expensive than what it was a few years ago. Some are asking for the payment up front rather than being built into the loan.

#5 B.feral3

Posted 19 February 2013 - 06:49 AM

We are looking at remortgaging with another bank as well. We wont pay LMI for reasons stated but it is still a relatively expensive exercise changing banks. We have about $800 in fees which doesn't include the penalty to break the fixed rate.

Good luck OP.

#6 GenWhy

Posted 19 February 2013 - 06:54 AM

Technically banks aren't allowed to charge exit fees anymore. But there is still fees for the title search and administration as well as the government fee for discharging a mortgage which is around $180 alone I think.

OP, I'd consider contacting a broker and asking them about going through Homeside. It's only accessible via a broker and is a subsidiary of NAB. They're pretty much the only institution allowing minimal to no start up fees and more accommodating mortgage insurers.

#7 FeralRebelWClaws

Posted 19 February 2013 - 07:52 AM

LMI does drop down more rapidly than I would have thought. We chatted with our lender when we were going to sell up and move. We were going to buy a house that was 100k less, which meant that instead of the 5% deposit we had 10% and instead of 13k LMI, it was 6k. Still a lot of money for paying someone else's insurance though  rolleyes.gif

Edited by PussyDids, 19 February 2013 - 07:53 AM.

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