Calculating LMI

[Scoobalimalima]

Hi guys,

Is LMI calculated on the property purchase price only or is it calculated including stamp duty and all other associated lending/settlement fees?

Cheers,

SLL

 

[Rolf Latham]

a few things

loan amount relative to the property value in steps 81 to 97 %

and

loan amount rirsk

with many lenders

there is a peg 0 to 300, 300 to 500, 500 to 750

others are 0 t 300, 0 to 600

whih lender are u looking at pls ?


ta
rofl

 

[Scoobalimalima]

I understand that the LMI amount varies according to LVR etc, I was just wondering if it's calculated including stamp duty etc or not.

Lender is Commonwealth Bank

SLL

 

[Rolf Latham]

the stamp duty on the mortgage insurance premium is normally quoted in the premium total.

The tables used dont add it automatically, but the various calculators do


ta
rolf

 

[MSB]

Does the premium on LMI vary significantly between lenders?
My CBA manager told me that they get good discount from Genworth due to bulk requests, hence the CBA clients pay less in premium compared to other lenders.

I did a calc on LMI at the CBA site and the value shown is slightly lower than the value shown at the Genworth site.

ME bank quoted slightly more than the CBA's LMI premium and CUA quoted slightly more than ME bank. All 3 go to Genworth for LMI so I don't understand why they differ for the same loan amount.

NAB seems to be going with QBE. I am not sure whether they are cheaper for LMI premiums.

Does anyone know why these vary and which lender offers the better rate on LMI premiums.

Thanks

 

[Rolf Latham]

Hi MSB

Too many variables for an easy answer.

Some of the fhog deals that QBE have with some insurers are relatively cheap

ta
rolf

 

[Scoobalimalima]

So is LMI calculated on the purchase price then stamp duty worked out on the total of purchase price + LMI. ??

SLL

 

[Rolf Latham]

lmi is calc on the loan amount and the property value

The stamp duty amount on the transfer of the property is not taken into account at all when doing LMI premium calcs

ta
rolf

 

[FelixL]

LMI have different tiers of customers based on volume and claims experience. CBA is exclusive to Genworth and NAB is exclusive to QBE, they have quite a bit cheaper rates respectively compare to other lenders

there is stamp duty on the LMI itself and there is stamp duty on the property. The calculation of the LMI premium does not factor in the property stamp duty, the stamp duty on the lmi however, takes into account both premium and gst

example
property = 500k
loan 450k
stamp duty (nsw) ~ 15k
lmi ~ 5k (mainly base on loan amount, lvr)
lmi gst = 0.5k
lmi stamp duty (nsw) = 9% * (5.5k)