Lenders mortgage insurance (LMI) is a common type of insurance used by individuals who don’t have a large enough deposit to buy a house but would still like to enter the property market. LMI is a type of insurance that protects lenders (or credit providers) in the event of a borrower defaulting on their home loan. LMI is often charged as a one-off cost that is added to a person’s home loan if they borrow more than 80 per cent of the property value from the bank. The cost of LMI can vary according to the total amount of the loan and the percentage of the property. When calculating the LMI amount, lenders take several factors into account, such as: Whether the individual has a stable job and therefore income Whether they have provided a reliable deposit Whether or not..