85% LVR With No LMI
85% LVR Home Loans with no LMI can be achieved in Australia in 2015. As a general rule, when you borrow over 80% LVR you will incur Lenders Mortgage Insurance (LMI). Lenders mortgage insurance protects the lender and not the borrower.
Nonetheless, being able to borrow 85% LVR without the need to pay Lenders Mortgage Insurance (LMI) is possible with 2 financial institutions in Australia. Best of all, the lenders who allow it give very sharp interest rates which are actually cheaper than most professional package home loans available with Major Banks.
As an example if you were to buy a house in Sydney for $600,000 and take up a loan with ANZ Bank at 85% LVR being $510,000.
If LMI is paid on the ANZ loan, the cost would be $6987.
|$510,000 @ 85% LVR||ANZBank||85% LVR No LMI Lender|
|With LMI||$6987||No LMI Payable|
|Without LMI||Must have LMI||No LMI Payable|
|Interest Rate with Pro Package||4.53%||4.38%|
85% LVR No LMI & No Genuine savings?
There are no genuine savings requirements when using the 85% no LMI policy.
Under what circumstances is the no LMI policy at 85% LVR permissible?
You can use the 85% LVR no Lenders Mortgage Insurance policy with both purchases and refinances. With a refinance, this policy comes in handy if you have a valuation shortfall and you need that little bit extra in borrowing space to refinance to a better rate without the need to pay LMI.
The 85% no LMI policy is for people with a clean credit report, and the primary applicant must be an Australian Citizen or Permanent resident. The borrower must have a good conduct on all their existing credit liabilities, with their last 6 months home loan statements in good order if the loan has a refinance component to it.
Lenders who Offer 85% LVR with No LMI?
There are 2 lenders in Australia who will offer 85% LVR No LMI. Both these lenders are large banks with slightly different policies. The product and policies is not well known, however, our brokers are specialists at this type of loan.
Properties types for 85% No LMI Loan?
This is dependent on the lender. One of the lenders can accept most areas without too many restrictions. However, with the other lender, all security properties must be residential and be located in Major City Metro areas like Sydney, Melbourne, Brisbane, Newcastle, Ballarat, Gold Coast, Cairns etc. Further, the second lender does not accept 2 properties being in the same suburb as security as this is seen as a concentration of risk for this policy.
The second lender does not like inner city apartments, acreages or vacant land under the 85% no LMI policy. Further the security property can not have any caveats registered on title at the time of application.
Loan types for 85%LVR with No LMI?
Depending on the lender, all loan products and pricing mechanisms are available using the 85% LVR no LMI rule. A borrower can get all professional package pricing and products available within the financial institutions. Hence you could get up to 0.94% discount for the life of the loan even under the 85%LVR No LMI policy.
Further, some lenders who offer this are waiving the application fees, or ongoing package fees.
At Mortgage Providers we are aware of all policy exceptions in the market place with different lenders. We know where we can get the 85% LVR with No Lenders Mortgage Insurance. Coupled with this, we know where to get this loan cheaper in terms of rates and have fees waived making this a leading product specialty with our consultants.