Understanding Lender's Mortgage Insurance (LMI) for Studio Apartment Loans

When applying for a studio apartment loan, lender's mortgage insurance (LMI) plays a key role in increasing the loan-to-value ratio (LVR). For units under 25 square metres, without LMI, the maximum LVR is 60%. However, by taking out LMI, borrowers can boost the LVR up to 80%, making it easier to finance small apartments.

For studio apartments between 25 and 35 square metres, the standard LVR is 70%. But with LMI, buyers can access a higher LVR of 80%, reducing the deposit required. Studio apartment loans with LMI are common for those looking to enter the property market sooner without having to save a large upfront deposit.

Studio apartment loans for units over 35 square metres, particularly for first-time buyers, benefit the most from LMI. Under the First Home Buyers Guarantee (FHBG) scheme, borrowers can secure an LVR of up to 95%, further lowering the initial costs. This makes studio apartments an affordable option for city living.

Disclaimer: The content provided is for informational purposes only and is not financial advice. Please consult a professional advisor to discuss your specific situation.