ME Bank and Virgin Money slash Lenders Mortgage Insurance

By Olivia Gee · · 2 min read
Fact Checked
Advertiser disclosure
Couple in a new house taking out a home loan without LMI

As lenders compete for home loan customers amid continued rate cuts, some are offering significant reductions on Lenders Mortgage Insurance (LMI).

Today, ME Bank announced a 25% cut to LMI for first home buyers combined with discount variable rates on the ME Flexible Home Loan. 

LMI is typically required on loans with a Loan to Value Ratio (LVR) below 80% (that is, when the deposit is less than 20% of the value of a property). Allowing borrowers with lower deposits to avoid this could cut thousands of dollars from the overall cost of a home loan. 

“We’ve combined our lowest-ever variable rate, no ongoing fees and our fully featured home loan product with an innovative LMI discount to help first home buyers smash through the deposit hurdle,” ME general manager of home lending, Andrew Bartolo said. 

To access ME's reduction and attractive new interest rates, borrowers must have a minimum 5% deposit, intend to live in the property, and start paying back the principal loan amount plus interest. Unlike many first home buyer offers, borrowers can still apply if they have previously or currently own a residential investment property.

The top 2.58% p.a. rate will be reserved for customers with a LVR under 80%. However, those with smaller deposits will still see substantial interest rate drops from ME’s current 4.31% p.a. headline offer. These start from:

- 2.79% p.a. for borrowers with an LVR between 80% and 90% 
- 3.59% p.a. for those with an LVR over 90%

RELATED: St.George reduces Lenders Mortgage Insurance to just $1 for first home buyers.

Virgin Money is going one step further and making LMI $0 for eligible borrowers, whether they’re first-time buyers or upgrading to a new property.

To be eligible, home buyers must apply for a Reward Me Home Loan (OO, P&I) with a deposit of at least 15% of the property’s value. This offer also comes with discounted rates, including:

- Variable rates starting from 2.89% p.a.
- Fixed rates starting from 2.49% p.a.

Home loan customers considering Virgin Money’s offer can apply until 29 November, but must have their loan settled by 30 May next year.

At ME Bank, borrowers can apply from today until 20 November, 2020, and need to settle by 26 February, 2021.

If you want to scan more mortgage options, check out the offers below or head to Mozo’s first home loan comparison page.

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can compare more home loans here.
Last updated 27 July 2024 Important disclosures and comparison rate warning*

Promoted

  • Basic Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • >80% LVR
    Interest rate
    6.29 % p.a.
    Variable
    Comparison rate
    6.32 % p.a.
    Initial monthly repayment
    $4,328
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.09 % p.a.
    Initial monthly repayment
    $4,540
    Go to site

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.30 % p.a.
    Initial monthly repayment
    $4,540
    Go to site

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.84 % p.a.
    Variable
    Comparison rate
    6.88 % p.a.
    Initial monthly repayment
    $4,582
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Basic Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • Offset Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.43 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

image of houses

Need help with refinancing?

You might have questions that need personal answers. We’ve teamed up with the mortgage brokers at Lendi to get you the answers you need, and a home loan deal you deserve.

Learn more

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Compare home loans