Your Fast Track to Buying Sooner and Building Wealth Faster

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👉 Lenders Mortgage Insurance: Secret Weapon or Money Down the Drain?

The Emotional Dilemma Every Aspiring Homebuyer Face

You’ve been saving diligently, but property prices keep rising faster than your deposit. You’re caught between two powerful emotions:

Fear: Waiting years to save a 20% deposit might mean missing out on your dream home — and losing tens of thousands in potential property equity growth.

Excitement: Paying Lenders Mortgage Insurance (LMI) to buy now might feel like an extra cost, but it could open the door to homeownership years earlier — jumpstarting your property investment journey.

Which emotion will shape your future?

What Waiting 3 Years Could Really Cost You

Based on average Australian property growth rates over recent years:

• Waiting three years to save the full deposit could cost you over $120,000 in missed property growth.

• Paying around $15,000 in LMI now could accelerate your entry into the housing market and wealth accumulation significantly.

Key takeaway: Every month you wait is potential equity lost.
 

The Powerful Benefit of Starting Early with LMI

By buying sooner, you begin: 

• Building equity through capital growth 

• Earning rental income to help pay down your loan

• Taking advantage of tax benefits earlier

• Locking in today’s property prices before they rise further

Waiting to save a full 20% deposit can delay your path to financial freedom. LMI helps you start sooner.

What Is Lenders Mortgage Insurance (LMI)?

Lenders Mortgage Insurance (LMI) is a one-off insurance premium that lenders require if your home loan deposit is less than 20%.

It protects the lender if you default, but it does not protect you directly.

Think of LMI as a bridge that lets you cross into property ownership earlier when saving a full deposit isn’t possible.
 

How LMI Protects the Lender — And Benefits You

While LMI protects the lender, it also leaves you with more money in your pocket upfront by:

• Allowing you to enter the property market earlier and capture capital growth sooner 

• Keeping your cash reserves intact for emergencies or investment opportunities

• Creating a financial safety net you can use strategically — such as funding an offset account or emergency fund

LMI isn’t just a cost; it’s a financial tool that provides flexibility and opportunity.

Real Client Example: Early Buyer in Redbank Plains, QLD

Sarah purchased with a 10% deposit in early 2022 using LMI. By 2024, her property value increased by over $110,000. Had she waited to save 20%, she would have missed this growth entirely.

“I didn’t even know LMI could work like this. Buying earlier changed everything for us.” — Sarah, Brisbane

How Much Does LMI Cost?

LMI premiums vary based on loan size, deposit percentage, property type, and lender policies.

For example, on a $400,000 loan at 90% Loan-to-Value Ratio (LVR), LMI can range from $5,840 to $7,800 depending on your lender and insurer.

Small differences in your deposit size or lender choice can save you thousands of dollars in LMI premiums.

Paying LMI: Upfront or Adding to Your Loan?

• Avoids interest charges on the LMI premium

• Lowers your total loan amount and interest

• Best if you have cash reserves available

• No large upfront payment required

• Spreads the cost over the loan term

• Helps preserve cash flow if upfront cash is tight

Using an offset account linked to your mortgage can reduce interest costs on the capitalised LMI premium.
 

Can You Avoid LMI?

LMI can be avoided if:

• You have a family guarantor backing your loan

• You qualify for lender waivers offered to certain professions or borrower profiles

• You save a full 20% deposit

For many Australians, however, LMI is a small price to pay for the invaluable benefit of buying property sooner.
 

Understanding Your Responsibility

LMI protects the lender if a loan isn’t fully repaid. However, if you default and your property sells for less than your loan balance, the lender may still seek repayment of any remaining debt beyond the sale proceeds.

This highlights the importance of:

• Borrowing within your financial means

• Budgeting carefully

• Maintaining an emergency fund or offset account

With proper planning, you can use LMI safely and responsibly to accelerate your property goals.

Why Wait and Miss Out?

If your income and finances are steady and organised, LMI can help you step into the property market sooner — unlocking years of equity and wealth growth.
 

How Get RARE Properties Can Help You

As independent buyer’s agents and property strategists, we help you:

• Understand how LMI fits your loan and borrowing options

• Compare lenders to find the best LMI premiums and loan structures

• Structure your borrowing power responsibly for long-term wealth building

• Navigate the Australian property market with confidence and clarity

Take Action Today

Book your free personal strategy session and start your property journey with expert guidance.
👉 getrare.com.au/ready

Prefer to learn first? Join our free property investing training to understand your options and build a clear path forward:
👉 getrare.com.au/stepup
 

If you know someone working hard to save a deposit, sharing this article could help them get into the property market sooner and smarter.
 

About Rasti Vaibhav

Rasti Vaibhav is a seasoned property investor and strategist who has built a portfolio of over 18 properties worth more than $10 million. He has helped more than 350 Australians buy smarter and faster — combining deep expertise with practical strategies for long-term wealth.
 

Summary of Key Points

• Waiting to save a full deposit can cost tens of thousands in missed property growth

• LMI lets you buy sooner with less upfront cash, providing a flexible financial safety net

• LMI premiums vary widely; small changes can save you thousands

• Responsible borrowing and careful planning are essential to minimise risks

• Expert guidance maximises your chances of a successful property journey

Disclaimer: This article is for educational purposes only and does not constitute financial advice. Please consult a licensed adviser or mortgage broker to discuss your specific circumstances.