LMI (Lenders Mortgage Insurance)

Lenders Mortgage Insurance (LMI) protects the lender if you can't make the loan repayments and the lender can't recover the loan balance. 

Keep in mind that an LMI insurer who pays the lender under an LMI policy can then come to you, the borrower, to repay the sum directly to it. LMI protects the lender, not you or a guarantor. 

If your loan to value ratio is above 80%, you usually have to pay a once-off fee to cover the cost of LMI for your lender. You can pay this fee on settlement or add it to the loan. If you add the LMI fee to your loan, interest will be charged when you repay it.