--- title: What is LMI? description: LMI or Lenders Mortgage Insurance is an insurance that protects the lender in the event of the borrower defaulting on the loan. ​That is if there is an event of default and the security property needs --- [Skip to content](https://support.fortunaadvisors.com.au/en/what-is-lmi#main-content) English Show submenu for translations ![Fortuna logo.png\]](https://support.fortunaadvisors.com.au/hs-fs/hubfs/Fortuna%20logo.png?height=40&name=Fortuna%20logo.png) - [Default HubSpot Blog](https://blog.fortunaadvisors.com.au/) Open main navigation Close main navigation - [Default HubSpot Blog](https://blog.fortunaadvisors.com.au/) - English Show submenu for translations - Fortuna Advisory Group Fortuna Advisory Group Hello. How can we help you? - There are no suggestions because the search field is empty. 1. [Help Center](https://support.fortunaadvisors.com.au/en?hsLang=en) 2. [Financial Planning Guides](https://support.fortunaadvisors.com.au/en/financial-planning-guides?hsLang=en) # What is LMI? LMI or Lenders Mortgage Insurance is an insurance that protects the lender in the event of the borrower defaulting on the loan. ​That is if there is an event of default and the security property needs to be sold to repay the lenders debt and there is not enough t from the sale to payout the loan LMI will cover that shortfall. ​Important to note this Is not an insurance that protects the borrower, but the lender. ​Ideally you would aim to have enough deposit (20% or more) to avoid lenders mortgage insurance, but practically this is not always possible especially for first home buyers. ​In the case where you have limited deposit and require LMI; - ensure you factor as an additional cost or are aware it will increase the amount you borrow. - Ensure you have your loan as principle an interest to start repaying the loan from day one and - don’t look to purchase property where LMI is required if you plan to hold the property only for a short time, as it will be hard to recover this additional cost in a short time. ​For low deposit home loans a Family or Security Guarantee can assist in avoiding LMI.   - [Webinars](https://support.fortunaadvisors.com.au/en/webinars?hsLang=en) - [COVID-19 Resources](https://support.fortunaadvisors.com.au/en/covid-19-resources?hsLang=en) - [Business Advisory Guides](https://support.fortunaadvisors.com.au/en/business-advisory-guides?hsLang=en) - [Tax & Compliance Guides](https://support.fortunaadvisors.com.au/en/tax-compliance-guides?hsLang=en) - [Xero Guides](https://support.fortunaadvisors.com.au/en/xero-guides?hsLang=en) - [Legal Advice](https://support.fortunaadvisors.com.au/en/legal-advice?hsLang=en) - [Financial Planning Guides](https://support.fortunaadvisors.com.au/en/financial-planning-guides?hsLang=en) - [Brokerage Guides](https://support.fortunaadvisors.com.au/en/brokerage-guides?hsLang=en) - [Default HubSpot Blog](https://blog.fortunaadvisors.com.au/) [![Chill listening crop-3](https://support.fortunaadvisors.com.au/hs-fs/hubfs/Fortuna%20logo.png?width=85&height=24&name=Fortuna%20logo.png "Chill listening crop-3")](https://support.fortunaadvisors.com.au?hsLang=en) Connect with us on social Copyright © 2026, Fortuna Advisory Group ![](https://px.ads.linkedin.com/collect/?pid=3610066&fmt=gif)