LMI (Lenders Mortgage Insurance) is a fee charged by banks when you borrow more than 80% of the value of a property. This fee is charged because the bank is outsourcing insurance to protect themselves in case you default on the loan. We have seen banks charge anywhere up to $20,000 or more for LMI depending on the financial position of the applicant. This is not always a fixed fee, although it is perceived that way. I would highly recommend that you seek advice on ways to reduce LMI before signing loan contracts with a bank.
In most situations LMI shouldn’t be a deterrent if you are purchasing a growth asset like property. Over time the increase in wealth from the property should be significantly higher than the cost of LMI.