LMI Refund Guide: Can You Get Your Lenders Mortgage Insurance Back?

You paid thousands of dollars in Lenders Mortgage Insurance (LMI) when you bought your home. Now you are refinancing or selling — and you want to know if any of that money is coming back.

The short answer: it is possible to receive a partial LMI refund, but only under specific conditions, and the window is narrow. Most refunds are only available within the first one to two years of the original loan. After that, the insurer considers the policy fully earned, and no refund is payable.

This guide explains exactly how LMI refund policies work across Australia’s three major insurers, how to claim a refund, what to realistically expect, and why avoiding LMI in the first place is a far better strategy.

Can You Get an LMI Refund?

Yes — in some cases. LMI refunds are possible when the insured loan is repaid early, typically through refinancing to a different lender or selling the property. However, the refund is not automatic, not guaranteed, and not available in all situations.

The Key Conditions for a Refund

The loan must be fully repaid — either through selling the property, refinancing with a new lender, or paying off the loan in full.
The repayment must occur within the refund eligibility window — this varies by insurer but is generally within the first 12 to 24 months.
No claim has been made on the policy — if the borrower has defaulted and the insurer has paid a claim, no refund is available.
The original lender must submit the refund request — you cannot apply directly to the insurer; it must go through your lender.

What You Won’t Get Back

LMI paid on a loan that has been in place for more than 2 years (in most cases)
Stamp duty on LMI (charged in some states — this is a government tax and is not refundable by the insurer)
Interest paid on capitalised LMI (if the premium was added to your loan, you have been paying interest on it — that interest is not recoverable)

How LMI Refund Policies Work

Australia has three main LMI providers: Helia (formerly Genworth), QBE Lenders’ Mortgage Insurance, and Arch LMI. Each has different refund policies, though all follow a similar declining-scale model.

Helia (Formerly Genworth)

Helia is Australia’s largest LMI provider. Their refund policy operates on a sliding scale:

Repaid within first 12 months: Partial refund available (typically 40–60% of the original premium after deducting administration fees)
Repaid between 12 and 24 months: Smaller partial refund (typically 20–40%)
Repaid after 24 months: No refund available

Helia’s exact refund percentages are not published publicly and can vary depending on the loan product and lender agreement. The refund is processed through the original lender, not directly with the borrower.

QBE Lenders’ Mortgage Insurance

QBE’s refund policy is broadly similar to Helia’s:

Repaid within first 12 months: Partial refund available
Repaid between 12 and 24 months: Reduced partial refund
Repaid after 24 months: Generally no refund

QBE also deducts administration fees and may apply a minimum earned premium (the insurer keeps a base amount regardless of how quickly the loan is repaid).

Arch LMI

Arch is a newer entrant to the Australian market. Their refund policy:

Repaid within first 12 months: Partial refund available
Repaid between 12 and 24 months: Reduced partial refund (may be less generous than Helia or QBE)
Repaid after 24 months: No refund

Important Notes About All Providers

Refund policies can change at any time and are at the insurer’s discretion
The lender’s agreement with the insurer may affect refund terms
Administration fees are deducted from any refund
The refund is paid to the lender, who then credits it to you
Processing can take 4–8 weeks from the date of the refund request

LMI Refund When Refinancing

Refinancing to a new lender triggers a full repayment of your original loan. If this occurs within the refund window, you may be eligible for a partial refund of your LMI premium.

How It Works

You refinance with a new lender.
The new loan pays out the old loan in full.
Your original lender notifies the LMI insurer that the loan has been repaid.
You (or your broker) request a refund through the original lender.
The insurer assesses the claim and, if eligible, calculates the refund.
The refund is credited to you through the original lender.

Typical Refund Amounts When Refinancing

Here are indicative refund ranges based on when you refinance (these are estimates only — actual refunds vary by insurer and policy):

Original LMI Paid	Refinance Within 6 Months	Refinance at 12 Months	Refinance at 18 Months	Refinance at 24 Months
$8,000	~$4,000–$5,000	~$2,500–$3,500	~$1,500–$2,000	~$500–$1,000
$14,000	~$7,000–$8,500	~$4,500–$6,000	~$2,500–$3,500	~$800–$1,500
$25,000	~$12,500–$15,000	~$8,000–$10,000	~$4,500–$6,000	~$1,500–$2,500
$35,000	~$17,500–$21,000	~$11,000–$14,000	~$6,000–$8,500	~$2,000–$3,500

As you can see, the refund declines steeply. After 24 months, there is typically no refund at all.

The Catch: You May Pay LMI Again

Here is the problem: if you refinance above 80% LVR with the new lender, you will be required to pay LMI again. The partial refund you receive from the old insurer may be less than the new LMI premium — meaning you end up paying more in total.

Example:

Original LMI: $14,000 (12 months ago)
Refund received: ~$5,000
New LMI with new lender: $8,000
Net cost: $17,000 total in LMI across both loans

You recovered $5,000 but paid $8,000 for the new policy. You are $3,000 worse off than if you had simply stayed with the original lender.

This is why a professional LMI waiver is so valuable when refinancing. If you qualify, you pay zero LMI with the new lender — making the refund pure saving rather than an offset against new costs.

LMI Refund When Selling

If you sell your property and repay the loan in full, the same refund eligibility applies. The key factor is how long the loan has been in place since the LMI was paid.

Selling Within 12 Months

If you sell within the first year, you have the strongest case for a meaningful refund. Contact your lender as soon as the sale settles to initiate the refund request.

Common scenario: You bought a property, circumstances changed (job relocation, relationship breakdown, inheritance of another property), and you need to sell. If this happens within 12 months of settlement, a refund of 40–60% of the original LMI premium may be available.

Selling Between 12 and 24 Months

A smaller refund may be available, typically 20–40% of the original premium. Whether the amount is worth pursuing depends on the size of the original LMI premium.

Selling After 24 Months

In most cases, no refund is available. The insurer considers the policy fully earned.

Selling Due to Financial Hardship

If you are selling because of financial difficulty, the refund assessment follows the same timeline-based criteria. The reason for selling does not change the refund calculation. However, if the lender has made a claim against the LMI policy (e.g., in a mortgagee sale), no refund is available — the insurer has already paid out.

How to Claim an LMI Refund: Step-by-Step

Step 1: Contact Your Lender (Not the Insurer)

LMI refund requests must go through your lender. You cannot contact the insurer directly. Call your lender’s customer service team and request an LMI refund assessment.

Step 2: Provide Loan Details

Your lender will need:

Your loan account number
The date the loan was fully repaid (settlement date of sale or refinancing)
Confirmation that the loan has been discharged

Step 3: The Lender Contacts the Insurer

Your lender submits the refund request to the LMI provider (Helia, QBE, or Arch). The insurer reviews the policy, confirms the repayment date, and calculates any refund based on their sliding scale.

Step 4: Refund Processed

If a refund is approved, the insurer pays it to the lender, who then credits it to your nominated account. This process typically takes 4 to 8 weeks from the date of the request.

Step 5: Verify the Amount

Check the refund amount against the insurer’s scale and your original LMI premium. If the amount seems incorrect, ask your lender for a breakdown of the calculation.

Tips for Maximising Your Refund

Act quickly — the sooner after loan repayment you request the refund, the higher the potential amount
Keep your records — have your original loan documents, settlement statement, and LMI receipt readily available
Ask your broker — if you used a mortgage broker, they can help facilitate the refund process
Check both lenders — if refinancing, ask your broker to factor the potential LMI refund into the refinancing cost-benefit analysis

What Most People Don’t Realise About LMI Refunds

Refunds Are Rare in Practice

While refund policies exist, very few borrowers actually receive them. The reason is simple: most people do not refinance or sell within the first two years of purchasing a property. By the time life circumstances prompt a change, the refund window has closed.

According to industry data, the average time between purchasing and first refinancing in Australia is approximately 3–4 years. This means the vast majority of borrowers are well past the refund eligibility window when they switch lenders.

The Refund Is Often Smaller Than Expected

Even within the eligible window, refunds are partial — not full. A borrower who paid $14,000 in LMI and refinances after 18 months might receive only $2,500–$3,500. While any money back is welcome, it is a fraction of the original cost.

Stamp Duty on LMI Is Not Refunded

In states where stamp duty is charged on LMI premiums (including NSW), this tax component is not refundable by the insurer. It is a government charge, and it adds to the irrecoverable cost of LMI.

Capitalised LMI Interest Is Not Recoverable

If you capitalised LMI onto your loan, you have been paying interest on the premium since settlement. A refund only returns a portion of the original premium — not the interest you have paid on it. On a $14,000 capitalised premium at 6% interest over 18 months, you have paid approximately $1,260 in interest on the LMI alone. That is gone regardless of any refund.

A Better Strategy: Avoid LMI Altogether

Given the limitations of LMI refunds — narrow window, declining scale, partial amounts only — the far better approach is to avoid paying LMI in the first place.

Professional LMI Waivers

If your profession qualifies, you pay zero LMI on purchase, zero on refinancing, and zero on any future lending. No refund needed because there is no cost to recoup.

Eligible professions include doctors, lawyers, accountants, engineers, nurses, teachers, IT professionals, and more. Most lenders require a minimum income of $150,000 (individual or household), though thresholds vary.

The savings are dramatic:

Scenario	Pay LMI + Hope for Refund	Use Professional Waiver
Purchase LMI cost	$14,000	$0
Refinance LMI cost (if LVR > 80%)	$5,000–$8,000	$0
Potential refund	$0–$5,000 (if within 2 years)	N/A
Net LMI cost	$9,000–$22,000	$0

Over a property ownership lifetime involving one purchase and one or two refinances, the cumulative LMI saving from a professional waiver can exceed $30,000.

Other LMI Avoidance Strategies

If you are not in an eligible profession, other strategies to avoid LMI include:

Saving a 20% deposit — eliminates LMI entirely, though requires significant time and savings
First Home Guarantee — government-backed, 5% deposit, no LMI for eligible first home buyers
Guarantor loans — a family member’s equity eliminates the need for LMI
Lender selection — some lenders waive LMI at 85% LVR for standard borrowers

Explore all options on our deposit options page.

Frequently Asked Questions

Can you get an LMI refund in Australia?

Yes, partial refunds may be available if your loan is repaid within the first 12 to 24 months through refinancing, selling, or paying off the loan in full. After 24 months, refunds are generally not available. Contact your lender to submit a refund request.

How much LMI refund will I get?

Refund amounts depend on the insurer, the time since the LMI was paid, and the original premium amount. Typically, refunds range from 40–60% of the premium if repaid within 6 months, declining to 20–40% at 12 months, and 0–20% at 18–24 months. After 24 months, no refund is usually available.

Can I get an LMI refund if I sell within 2 years?

Potentially, yes. If the loan is repaid in full (through sale) within 24 months of the original LMI being charged, a partial refund may be available. The amount decreases the longer you have held the loan.

How long does an LMI refund take?

Typically 4 to 8 weeks from the date the lender submits the refund request to the insurer. The refund is paid to the lender, who then credits it to you.

Is LMI stamp duty refundable?

No. Stamp duty charged on LMI premiums is a state government tax and is not refundable by the LMI insurer.

Do I get an LMI refund if I pay off my loan early?

If you pay off your entire loan (not just make extra repayments) within the refund window (typically 12–24 months), a partial refund may be available. Making extra repayments that do not fully discharge the loan does not trigger a refund.

What if I refinance with the same lender?

If you switch to a different product with the same lender, the original LMI policy typically remains in place. No refund is triggered because the loan is not being repaid — it is being restructured. This is actually an advantage: you avoid both paying new LMI and losing your existing policy.

Can my broker help me get an LMI refund?

Yes. If you used a mortgage broker for your original purchase, they can help facilitate the refund request through the original lender. If refinancing, a good broker will factor the potential LMI refund into the overall cost-benefit analysis of switching lenders.

Next Steps

If you have recently paid LMI and are considering refinancing or selling within the first two years, explore whether a refund is available. But the most valuable step you can take is to ensure you never pay LMI again.

Check your professional LMI waiver eligibility — free, 60 seconds, no credit check
Learn about refinancing to remove LMI — the permanent solution
Understand how LMI works — know what you are paying for
Explore all eligible professions — you may qualify and not know it