Borrowing 95% or More: High-LVR Loans With LMI Explained

The short answer

With specific lenders, you can borrow up to 95% of a property’s value with LMI, and in some cases up to around 98% once the LMI is added to your loan.

It’s a way into the market with a small deposit when the government schemes or a parental guarantee aren’t an option. But it comes with extra costs and stricter criteria, so it’s worth understanding before you commit.

How high can you go?

Loan purpose	Typical maximum
Owner-occupied	Up to 95% at specific lenders, or around 98% with LMI added to the loan
Investment	Most lenders cap at 90%

Borrowing 95% is more common for owner-occupied homes. For investment properties, most lenders stop at 90%.

Who it suits

A high-LVR loan with LMI can suit buyers with strong, stable income and a small deposit, who aren’t eligible for, or can’t use, the other options. For example:

• Over the price cap: the property costs more than the 5% Deposit Scheme allows.
• Not a first home buyer: you’ve owned property before.
• No family guarantee available: a parental guarantee isn’t an option.

Stricter criteria at high LVRs

The more you borrow against a property, the more carefully lenders and LMI insurers look at your application. Expect:

• Genuine savings: usually around 5% of the purchase price, saved over time. See our deposits and genuine savings lesson.
• Stable employment: a solid work history and reliable income.
• A clean credit history: few enquiries, and no defaults or missed payments.
• Property and location rules: some property types, postcodes and smaller apartments may be capped at lower LVRs.
• Higher rates: high-LVR loans often sit in a higher pricing tier than loans at 80% or below.

The cost of LMI

LMI is a one-off premium, and it rises sharply as your LVR climbs above 90%. On larger loans with smaller deposits, it can run into tens of thousands of dollars.

Adding LMI to your loan: most lenders let you add the premium to your loan, so you don’t need the cash upfront. But you’ll pay interest on it over the life of the loan.

Example: adding $30,000 of LMI to a 30-year loan at 6.00% p.a. costs about $35,000 in extra interest if it’s never paid down early. That’s around $65,000 in total, so it’s worth paying down sooner where you can.

Compare the alternatives first

Before paying LMI, check whether you can avoid it:

• The 5% Deposit Scheme: eligible first home buyers can borrow up to 95% with no LMI.
• A parental guarantee: borrow up to 100%, including stamp duty, with specific lenders, and no LMI.
• Professional LMI waivers: eligible professionals, such as medical staff, accountants, lawyers and bank staff, may borrow up to 85–90% without LMI.

Buy now or wait? LMI is a real cost, but so is waiting. While you save a bigger deposit, you’re still paying rent, and property prices can move in the meantime. For some buyers, paying LMI to get in sooner makes sense.

Small deposit? Let’s find the best way in

With access to over 40 lenders, our team of lending specialists can check which schemes, waivers or guarantees you qualify for first, then find the right high-LVR lender if LMI is the best path.

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General information only. This article does not consider your objectives, financial situation or needs and is not credit, financial or tax advice. Lender and LMI insurer policies vary and change regularly. Examples are illustrative and rates are hypothetical. Seek advice from a licensed credit adviser before acting. Insight Property Finance.