So, you took out a home loan with a loan-to-value ratio (LVR) of more than 80% and as a result had to pay for LMI. We'll, if your mortgage is only a year or two old and you refinance or repay the debt, you might be able to apply for an LMI refund.
In such cases, the policy would become obsolete, and your lender and its LMI provider (the two aren't mutually exclusive) might be willing to financially recognise that.
How do LMI refunds work?
When you repay or refinance your home loan, your bank or lender won't be the one to refund your LMI premium - it's not their money to refund and you're not technically a party on the insurance product .
Banks often seem like the purveyor of LMI premiums. However, in actuality, LMI policies are generally written by specialist insurers and banks just pass the cost on in full to you, the borrower. Moreover, LMI protects the lender in the case you default and it loses money - you're not the policy owner.
Still, many lenders are willing to act as the middle man, requesting a refund of the LMI premium that you paid for and passing it onto you.
- Pro tip
Australia's two major mortgage insurance providers, Helia and QBE, don't allow refunds if a request isn’t made within a certain timeframe after the loan is repaid. If you’ve made a request with your lender, it's worth following up to make sure it gets passed on in time.
Additionally, you likely won't get 100% of your LMI premium back. After all, the policy kicks in immediately from the date of settlement, meaning your lender has benefited from its protection from day-dot.
Who is eligible for an LMI refund?
There are two ways you might find yourself eligable for an LMI refund:
LMI refund for paying off the mortgage early
If you repay your home loan entirely, you might be able to get a partial LMI refund. In general, to be eligible for an LMI refund, the loan must have been repaid within two years of the settlement date and the refunded amount must be greater than $500.
By law (the Banking Code of Practice) whenever a borrower is charged LMI, they must be given a fact sheet outlining the policy features and terms. This document will detail whether there are circumstances in which they're entitled to a refund.
LMI refund for refinancing
You might also be eligible for a partial LMI refund if you refinance your home loan within the first few years. When you refinance a home loan, you essentially ask another lender to pay the balance of your existing mortgage. You'll then owe your new lender, while your original loan facility will be closed.
It makes sense, then, that refinancing is generally considered the same as repaying a loan when it comes to LMI refunds.
Can you transfer an LMI policy when refinancing?
Beware, however, than if you're LVR is over 80% at the time you refinance your existing home loan, you'll likely be charged for a new LMI policy. That new policy could very well be more than the refund you might expect to receive.
An LMI policy is taken out between a lender and an insurer, with the cost passed on to borrowers. Just like you can't transfer a home and contents insurance policy to a new property, you normally can’t transfer an LMI policy over to a different lender when refinancing.
Even if you’re internally refinancing with the same lender, your new loan might still need a new LMI policy. Some lenders though might deduct the cost of the original premium from the new, or at least offer the new one at a discounted rate.
LMI refund policy at Australia’s largest banks
These details are correct as of November 2025.
- CommBank
Until the end of 2025, Australia’s largest bank uses Helia for its LMI. Helia policy allows partial premium refunds of up to 40% when the loan was repaid within a year and 20% if it was repaid between one and two years. At CommBank though, no LMI refunds are granted.
- Westpac
Westpac has a separate LMI business and at the bank, as well as with its subsidaries St George, BankSA and Bank of Melbourne, customers are entitled to a partial mortgage insurance premium refund under the following conditions:- The loan is repaid in its entirety and the mortgage discharged
- If this happens within 12 months of settlement, a 40% refund applies
- If this happens between 12 and 23 months after settlement, a 20% refund applies
- The loan can’t have been in arrears
- The refund must be greater than a minimum threshold (borrowers should check with their lender about their threshold)
- The loan is repaid in its entirety and the mortgage discharged
- NAB
NAB deals with QBE for all its LMI policies. The general policy at QBE is that refunds are only available for loans repaid within twelve months. However, according to NAB, customers can get a 40% refund of LMI premiums on loans repaid within one year of settlement. LMI premiums on loans written before mid-2024 may be eligible for a partial refund if repaid within two years. - ANZ
ANZ has an in-house LMI provider. ANZ customers might be able to get a 50% refund for loans paid off within 12 months of settlement, and a 25% refund if the loan is repaid between 12 and 23 months of settlement.
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
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