250K Savings/LMI Analysis

Target 250K Savings (JUN26) / LMI Analysis

Created the Allocation of 250K Savings for our Down Payment for Property2.

For curiosity purposes, I’ve created an LMI Analysis with different Savings amounts to see how the LMI would be adjusted keeping the same Purchase Amount. Excluding the nominal amount for Savings, it looks like the LMI is calculated based on the LVR%. Stamp Duty stays the same at 35K, or about 3.9% of the Purchase Price. The Stamp Duty is upfront costs and added to the Down Payment, so 20% of 900K=180K+35K Stamp Duty=215K Savings, not just the 180K Savings, otherwise, LMI would be added.

What’s interesting is the following:

Savings: 215K / LMI: 0 / LVR% 80% (Scenario 1)

Savings: 180K / LMI: 7.9K / LVR% 84% (Scenario 2)

Savings: 150K / LMI: 12.7K / LVR% 87% (Scenario 3)

Savings: 125K / LMI: 28.1K / LVR% 90% (Scenario 4)

LVR% at incremental 3% of about 25K Savings, LMI changes significantly from 12.7K-to-28.1K. For an additional Savings of 25K, can save 15.4K in LMI. (Scenario 3/4)

An additional Savings of 65K, can save 12.7K in LMI. (Scenario 1/3)

An additional Savings of 30K, can save 4.8K in LMI. (Scenario 2/3)

An additional Savings of 35K, can save 7.9K in LMI. (Scenario 1/2)

Scenario 2/3 is looking pretty good. That would give us a more comfortable cushion having that extra equity. LMI of 10K is nothing as this can be added to our 25Y mortgage. Can easily earn that in interest in one year for an additional 30K in cash cushion, which we can put into our Offset Acct, which would lower our mortgage interest, but we have the option of Redrawing anytime.