Australia’s largest insurer raises LMI pricing loader

by Miklos Bolza06 Jan 2017
QBE has announced an increase in the cost of lenders’ mortgage insurance (LMI) for property investors with the surcharge (or pricing loader) rising from 7% to 12%, reports the Australian Financial Review.
 
LMI for owner-occupiers will remain as is with the 8% first home buyer discount being extended to mortgages up to $1.2 million.
 
This is the first increase in three years, a QBE spokesperson said.
 
“Our experience shows first home buyers perform better than our average portfolio and we are pleased to continue to provide an 8% discount. The premium loading for investors has been increased to 12%, reflecting increased risk compared to lending to owner-occupiers.”
 
The minimum fee for QBE’s new and existing LMI products will also increase to $950.
 
Despite these changes, the firm will remain competitive, the spokesperson said.
 
A spokesperson from Genworth told AFR the firm had increased rates by 5% in the first half of 2016. The firm provides LMI for National Australia Bank, Commonwealth Bank of Australia and over 100 smaller lenders.
 
Related stories:
 
Insurers launch immediate pre-settlement cover
 
Is the need for third-party LMI necessary?
 
QBE to sell off part of LMI arm

COMMENTS

  • by Really? 6/01/2017 9:09:27 AM

    Ned Kelly must have wished he was born in this time period......

  • by Aging broker 9/01/2017 11:25:12 AM

    How about a royal commission into the LMI industry instead of the banks, Shorten.

  • by Broker 9/01/2017 11:50:43 AM

    Easy decision to make when you already know that your main competitor will do the same isn't it , very much like our banks do.