LMI Rebate?
- Thread starter hello1234
- Start date
Good luck with that. 
Hi All,
If I paid LMI on a 90% LVR borrowing, but the property increased in value by 10% (and thus at 80% LVR now) within a year, would the bank/mortgage insurers refund all or part of the LMI to me?
Thank you
Hey hello1234, unfortunately they won't do it. Have had a few wins with LMI over the years but not on this one. Banks have really clamped down on any LMI refunds since about January 2012.
Last edited by a moderator:
Unfortunately they wont.
If you revalue and withdraw more equity, your already paid LMI will be credited - meaning you'll only pay the difference if you push your LVR back up.
For info, you can find Genworths (the main insurer) policy on refunds here. Your scenario sits on the bottom of pg 44. (http://www.genworth.com.au/docs/und...licy-(australia)-lmiupa0414.pdf?Status=Master).
If you revalue and withdraw more equity, your already paid LMI will be credited - meaning you'll only pay the difference if you push your LVR back up.
For info, you can find Genworths (the main insurer) policy on refunds here. Your scenario sits on the bottom of pg 44. (http://www.genworth.com.au/docs/und...licy-(australia)-lmiupa0414.pdf?Status=Master).
I tried that and got hit with "The LMI you have already paid for doesn't cover New Money Borrowings"
Chomp
That's a bit misleading.
The existing LMI is credited, for example:
Purchase property
LMI liable of $3000
Revalue in the future and increase loan, new LMI for LVR + loan amount = $4000
Net LMI payable is $1000.
It's also worth noting that most lenders have a minimum LMI charge payable, usually ~$600, so even if your net payment required is less than this figure, the minimum figure will be charged.
It should do - it's not normally an issue but has to be made clear by the borrower/broker sorting out the top up.
Cheers
Jamie
Hi All,
If I paid LMI on a 90% LVR borrowing, but the property increased in value by 10% (and thus at 80% LVR now) within a year, would the bank/mortgage insurers refund all or part of the LMI to me?
Thank you
I Wish !!!!
Last edited by a moderator:
If your increase is going to the same lender than the LMI already paid will definitely form a portion of the new premium.
What if the increase is going to a different lender but that lender uses the same mortgage insurer as the prior lender?
They won't do it. Prob best to stick with the existing unless there's a strong reason to suggest otherwise.
Cheers
Jamie
Last edited by a moderator:
Unfortunately, the new lender will charge you the full LMI payable.
In this scenario it possibly would need to be pushed through. The subdivision changes the nature of the security property and in many cases the loan would be re-originated from scratch. If the assessor is lazy, they'd simply charge a whole new LMI premium.
No chance.
The government got rid of early repayment fees in 2011 to make moving lenders easier and gave themselves a pat on the back for it. They were told to investigate making mortgage portable but it's never gone anywhere. There is a lot that goes on behind the scenes with LMI it it would be almost impossible to pull off even if the government and banks were interested.
Last edited by a moderator:
even if they did, its often a silly and short sighted thing for many investors to do
ta
rolf
ta
rolf
It makes sense that it's portable, but different DUA across banks... so many variables.
Then at the end of the day would be less revenue to the insurer who would then recover the loss through increased premiums. Then benefit would be gone.
From this document, it looks as though LMI is refunded if the loan is discharged within 2 years (ie. from sale). Am I reading that correctly?
If so, I've got a question for Brady. Does CBA's "Low Deposit Premium" have a similar refund?
