Mortgage borrowers have surprisingly little understanding of lenders mortgage insurance and few brokers are likely to recommend it to them, new research shows.
A survey of mortgage brokers by CoreData for Helia’s 2024 Mortgage Broker Research Report found that more than 80 per cent of borrowers have “basic to low” understanding of LMI.
Asked how often they recommend LMI, 34 per cent of brokers said “rarely” and 25 per cent said in less than a quarter of cases. When they do recommend it, it is usually to first home buyers.
The majority of brokers said less than 10 per cent of their business volume involves LMI.
Borrowers who are familiar with LMI see it as a way of getting their clients into the property market sooner, allowing for a purchase with less than 20 per cent deposit. But they are put off by a negative view of the cost versus benefit equation.