You have been quoted a premium. This shows what it does to the loan — the repayment, the ratio, and what borrowing it rather than paying it actually costs.
It does not quote a premium and cannot. Mortgage insurance is priced from the insurers’ own rate tables, which are commercial documents issued to lenders and are not published.
Shows what a lenders mortgage insurance premium you have been quoted does to your loan: the repayment, the loan-to-value ratio, and what capitalising it costs in interest.
LMI premium you have been quoted
The figure from your lender. If you have not been quoted one yet, this calculator is not the right tool — ask the lender first.
Add the premium to the loan
Capitalising means borrowing it. The alternative is finding the cash at settlement, which most borrowers paying insurance cannot do — which is exactly why the option exists and why its cost is worth seeing.
Loan before any premium
The amount you are borrowing for the property itself. The premium is added to this if you capitalise it.
The most useful line is the total cost of the premium if financed. A premium of a few thousand dollars borrowed over thirty years costs considerably more than its face value, and the difference is interest nobody quoted you.
The two loan-to-value ratios are worth comparing. Capitalising the premium pushes the ratio back up — occasionally back above the threshold the borrower was trying to get under, which is a genuinely unwelcome surprise at approval.
The increase in the repayment is small per month and large over a term. Both framings are shown because borrowers decide on the monthly figure and live with the total.
Every figure below is computed by the same calculator on this page, from the inputs described. Nothing here is typed in by hand, so an example cannot disagree with the tool.
Look at the total cost of the premium against the premium itself. Financing it roughly doubles what it costs, which is the number nobody puts in front of a first home buyer.
The repayment and the ratio are unchanged, and the cost is the premium and nothing more. If the cash exists, this is what capitalising is being compared against.
The repayment is computed twice from the standard annuity formula: once on the loan alone, once on the loan plus the premium. The difference is what capitalising costs each month.
The interest attributable to the premium is the difference between the two totals over the full term, less the premium itself. That separates the cost of the insurance from the cost of financing it.
The premium is correct
Every figure downstream depends on the quote you entered. Premiums vary between insurers and between lenders using the same insurer.
The loan runs its full term
Most loans do not. Refinancing or selling earlier reduces the interest paid on the capitalised premium, and the premium is generally not refundable.
One rate throughout
The comparison holds the rate constant, which isolates the effect of the premium rather than mixing it with rate movement.
It insures the lender
Mortgage insurance protects the lender against loss on your loan. You pay it; you are not covered by it. Borrowers routinely assume the opposite.
No premium is estimated
Nothing here produces a premium. Any figure you see quoted as a typical premium elsewhere is a guess at a commercially confidential table.
Waivers are not modelled
Some professions and some guarantor arrangements avoid the premium entirely. Whether either applies is a question for the lender.
Works out the loan-to-value ratio: how much is borrowed as a percentage of what the property is worth.
Brackets the cost of completing a purchase: transfer duty exactly from the statutory scale, and the professional fees you have been quoted as a low-to-high range.
Solves for the loan a set of assumptions you control will support — income, declared expenses, commitments, an assessment buffer and a surplus you want to keep.
This calculator can be embedded on a business website, branded to match it, with a call to action that sends the enquiry to that business rather than collecting anything here.