Mortgage guarantee insurance is a type of insurance that protects against default on home loans. Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get. Typically, borrowers making a down payment of less than 20 per cent of the home’s purchase price will need to pay for mortgage insurance. Mortgage insurance is an additional monthly expense you’ll need to consider. Your lender will likely automatically include your PMI (private mortgage insurance) cost in your monthly mortgage payment. The lender oversees selecting the mortgage insurance company, so you won’t be able to shop around, but you can ask for a quote before you finalise your paperwork.
There are different types of mortgage insurance that you should be familiar with, including:
Borrower-Paid Mortgage Insurance (BPMI): You’ll pay insurance throughout your mortgage term.
Lender-Paid Mortgage Insurance (LPMI): Your lender pays your mortgage insurance – but you get a slightly higher mortgage rate.
It is not compulsory to take out Mortgage Protection insurance. However, many brokers and lenders recommend that borrowers consider this a means to protect their ability to repay their mortgage in the sudden event of sickness and inability to work.
Alford Point, Bangor, Barden Ridge, Bonnet Bay, Bundeena, Burraneer, Caringbah, Commo, Cronulla, Dolans Point, Engadine, Grays point, Greenhills Beach, Gymea, Heathcote, Illawong, Jannali, Kangaroo Point, Kareela, Kirrawee, Lilli Pilli, Maianbar, Oyster bay, Miranda, Sandy Point, Sutherland, Sylvania, Taren Point, Waterfall, Woolooware, Woronora, Yarrawarrah and Yowie Bay.
St George area
Allawah, Banksia, Bardwell Valley, Bexley, Beverly Park, Blakehurst, Brighton Le-Sands, Carlton, Connels Point, Hurstville, Kogarah, Kyeemagh, Kyle Bay, Lugarno, Monterey, Mortdale, Narwee, Oatley, Peakhurst, Penhurst, Ramsgate, Riverwood, Rockdale, Sandringham and Sans Souci.
Inner West includes the suburbs of
Annadale, Ashfield, Balmain, Birchgrove, Dobroyd Point, Dulwich Hill, Enmore, Haberfield, Leichhardt, Lewisham, Lilyfield, Marrickville, Petersham, Rozelle, Stanmore, St Peters, Summer Hill, Sydenham, Tempe, Camperdown, Croyden, Croyden Park, Hurlstone Park and Newtown.
Eastern suburbs
The suburbs surrounding the southern shores of Sydney Habour: Vaucluse, Rose Bay, Darling Point, Double Bay, Point Piper, Woollahra, Edgecliff, Woolloomooloo, Watson Bay, Potts Point, Rushcutter Bay, Elizabeth Bay, Bellevue Hill, Waverley and Bondi Junction.
Coastal
Dover Heights, Bondi, Bronte, Tamarama, Clovelly and Coogee.
Inner City
Darlinghurst, Surry Hills, Moore Park, Centennial Park, Paddington and Queens Park.
