First home buyers choosing LMI over savings
Borrowers would rather borrow with low deposits and pay lenders mortgage insurance than save for a larger deposit to avoid the extra expense.
“Rising property prices in many markets and a low interest rate environment may make lender's mortgage insurance (LMI) an increasingly attractive solution to first home buyers looking to enter the property market,” Bridget Sakr, chief commercial officer of Genworth Australia, told The Adviser.
“One in two prospective first home buyers consider the goal of homeownership to be unrealistic… having said that, one in two consumers also recognise – with low rates and prices on the rise – that now is a good time to buy, but many feel saving a 20 per cent deposit is unrealistic.”
Source: The Adviser