For many Australians, purchasing a home is a significant financial milestone. However, the path to homeownership often comes with hurdles like saving for a large deposit and dealing with additional costs such as Lenders Mortgage Insurance (LMI). At Wity, we're committed to making homeownership more accessible by reducing the deposit requirement and, in many cases, helping you avoid LMI altogether. Here's how we do it.
What is Lenders Mortgage Insurance (LMI)?
Lenders Mortgage Insurance (LMI) protects lenders if a borrower defaults on their home loan. If you have less than a 20% deposit, lenders typically require you to pay LMI. This cost can be substantial, often amounting to thousands of dollars, which is why many homebuyers aim to save 20% or more of the property's value before applying for a loan.
How Wity Helps You Avoid LMI
At Wity, we understand that saving a 20% deposit can be challenging, especially in today's property market. That's why we offer solutions that can help you move into your dream home sooner, without the burden of paying for LMI:
15% Deposit Option
Unlike traditional lenders that require a 20% deposit to avoid LMI, Wity allows you to secure a home loan with just a 15% deposit. This means you can save less and still avoid the extra cost of LMI.
10% Deposit for Medical Professionals and Emergency Services
For registered nurses, midwives, and other emergency services and medical practitioners, we offer a unique 10% deposit option. This tailored solution helps these essential workers secure a home loan with a lower deposit while avoiding the cost of LMI.
5% Deposit for Various Professions
For certain professions, including healthcare workers, teachers, and first responders, we offer an even more attractive option. You can borrow up to 95% of the property's value with only a 5% deposit—without an LMI fee. This significantly reduces the upfront costs and accelerates your journey to homeownership.
Why LMI Exists and When It's Necessary
LMI is typically required when the loan-to-value ratio (LVR) exceeds 80%, meaning the borrower has less than a 20% deposit. The insurance covers the lender, not the borrower, if the borrower defaults on their home loan. However, with Wity's innovative approach, many borrowers can bypass this requirement, thanks to our tailored solutions.
The Financial Impact of LMI
LMI can significantly increase the cost of buying a home. It's usually calculated as a percentage of the loan amount, ranging from 1% to 3%. For example, the LMI fee on a $500,000 loan could add an extra $5,000 to $15,000 to your costs—money that could be better spent on your new home or moving expenses.
Wity's Commitment to Reducing Homeownership Costs
At Wity, our mission is to empower Australian homeowners by reducing the barriers to homeownership. Our solutions are designed to help you save on upfront costs so you can focus on what truly matters—enjoying your new home.
Lower Deposit Requirements: Our 15% deposit option helps you sidestep LMI, saving you thousands.
Special Packages for Professionals: Our 5% and 10% deposit options allow eligible professionals to borrow up to 95% without paying LMI, making it easier to enter the property market sooner.
Comparing the Costs: LMI vs. Larger Deposits
While saving for a larger deposit is one way to avoid LMI, it can delay your home purchase. With rising property prices, the longer you wait, the more expensive your dream home may become. Wity's deposit options balance saving enough to avoid LMI and entering the property market before prices increase further.
Tips for Managing Homeownership Costs with Wity
Leverage Wity's Lower Deposit Options: By choosing Wity, you can move into your new home with a smaller deposit and avoid the high costs of LMI.
Explore Government Schemes: Besides Wity's offerings, consider government schemes like the First Home Loan Deposit Scheme (FHLDS), which can further reduce your upfront costs.
Consult Wity's Mortgage Experts: Our team is here to help you navigate the complexities of home loans and find the best solution for your financial situation.
Lenders Mortgage Insurance can be a costly requirement for many homebuyers, but it doesn't have to be a barrier to owning your dream home.
At Wity, we're dedicated to making homeownership more accessible by offering solutions that reduce the need for a large deposit and help you avoid LMI fees.
With our 15% deposit option and special 5% and 10% deposit packages for eligible professionals, Wity empowers you to take control of your financial future and achieve homeownership faster. Contact us today to learn how we can help you move into your new home sooner.
