Brick to the Future: Property Investment Show
Brick to the Future: Property Investment Show
Season 4, Episode 62: Why Paying LMI is an Investment, Not a Waste of Money
Listen Now for a breakdown on leveraging lenders Mortgage Insurance (LMI) to overcome barriers and secure your spot in the property market!
In this episode, we dive into the challenges young Australians face in today’s property market. With median house prices across capital cities now reaching $855,877 (up from $596,018 in 2019), saving a 20% deposit has become a daunting task. Rising living costs, inflation, and low household savings make it harder than ever to achieve homeownership.
Key Topics Covered:
- Challenges of Saving for a 20% Deposit
- The average deposit needed is now $159,000—a 50% increase since 2020, meaning it can take up to 10 years to save the full amount in today’s market.
- Median property prices jumped 7% from 2023 to 2024, highlighting the financial cost of waiting.
- Why Paying LMI is a Strategic Choice
- Lenders Mortgage Insurance (LMI) allows buyers to enter the market sooner with a 5-10% deposit.
- Although LMI is an additional cost (typically 1-2% of the loan), it enables buyers to capture property appreciation immediately.
- Outpacing Rising Prices and Building Wealth
- By opting to pay LMI, buyers may achieve faster equity growth than they would by saving for a 20% deposit.
- For investors, LMI is often tax-deductible, further reducing its impact on overall costs.
Takeaway:
For many, paying LMI is a stepping stone to get into the property market today, potentially offering more financial benefits than saving for years. If you're ready to learn how LMI can work for you, tune in to hear why it’s a tool worth considering in your property journey.
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