I got a 40% refund for LMI paid for a loan that I refinanced after 7 months back in 2007. I would move quick, because I believe (not sure if it is still the case), that after 12 months, you can't get a refund. Well that was the LMI provider's policy.
You only get a refund if you refinance, and then request it from the LMI provider. You cant just apply for a refund if you have paid the loan down, whats to stop you from drawing it up again and exposing the bank to risk?
As Rolf alluded to, if your intention is to take out further borrowings down the track, you are better off keeping your 'cover' of LMI because you will only (depending on the lender) be charged a further premium on the increased borrowings, and not the whole lot all over again.
Well the plan is to buy again towards the end of the year where we will most likely need to use LMI again. I will attempt to get a partial refund at the time of purchasing our our next property, it's worth a shot.
A couple of years ago a obtained a 50% refund on my $8,000 LMI from Westpac Bank.
I bought at a great price through a friends auntie, but the bank said that the sale price was the true market value.
So after I completed some minor reno's on the kitchen, plastered up the cracks and painted the whole house, I argued that due to the reno's AND my buying under market value, the house was now valued higher and therefore was now under the 85% LVR threshold (Westpac used to offer 85% with no LMI - now back to 80%).
I argued, argued and argued with the Westpac guy over emails, and he eventually wrote back and told me that he was "delighted to report that he is able to give me a 50% refund".
I only thought it was worthwhile trying to get a refund after reading about someone else doing the same in the API magazine.