GoNuke,Yes and no. I can't quite remember the number of defaults...

GoNuke,

Yes and no. I can't quite remember the number of defaults but I'm sure the figure is quite low. From the bank's perspective having internal LMI may increase their risk but it also increases their margin on loan facilities as customers are paying maybe 40k+ in mortgage insurance over the life of the loan and that's money the bank isn't having to lend to them.

LMI is staggered in 5% increments with regards to LVR and in total borrowings.

Remember you can claim a portion of the LMI if it sits against an investment property...

What people need to be aware of is when you have over 1 million in facilities with one of the insurers they start tightening the belt big time, especially Genworth.

With my clients we have their facilities standing alone and with different mortgage insurers.