You may be required to pay for Lenders' Mortgage Insurance if you borrow more than 80% of the value of the property you are purchasing. Some lenders charge mortgage insurance from as little as 60% of the value of your property. It covers the lender if there is a shortfall after the lender exercises its right to sell the mortgaged property due to a borrower not complying with the loan agreement and mortgage. That is, if you do not make your repayments, your lender has the right to sell your property.

It does not protect you from having to pay what you owe on a mortgage. It does not pay out the loan in the event of the borrower's death or injury, nor cover loan repayments in the case of illness or unemployment, and therefore should not be confused with Life Insurance or Mortgage Protection Insurance. Remember, if you can contribute to more than 20% to the purchase price of the property, Lenders' Mortgage Insurance may not be required