Recent results show growth, but 2026 is shaping up to be the true testing ground
QBE, one of Australia’s two major providers of lenders mortgage insurance (LMI), delivered surprisingly robust annual results for this hard-pressed segment on Friday.
Gross written LMI premiums increased by 5% to $110 million, marking what QBE called “a pleasing recovery from a prolonged period of decline”.
Granted this was largely due to a broader housing market shift as activity skyrocketed in the year amid a rate-easing cycle, but it helped to lift QBE’s constant-currency growth by more than expected in the APAC region.
LMI providers like QBE and Helia (Australia’s premier LMI specialist) are facing an existential challenge from government intervention into the first-home buyer market.
Labor’s expansion of the federal 5% Deposit Scheme, which came into effect in October 2025, allows eligible first‑home buyers to purchase a property with as little as a 5% deposit, without paying for LMI.
Read more: First Home Guarantee helps 21,000 Aussies since October expansion
Banks have traditionally required low‑deposit first‑home buyers to pay costly LMI, but with the government now guaranteeing up to 15% of the property’s value for effectively all first‑home buyers, the future viability of the LMI market has been called into question.
It is clear that, despite surprisingly strong growth in premiums in 2025, LMI is becoming an increasingly smaller piece of the QBE pie. In 2024, it constituted 3.4% of QBE’s APAC net insurance revenue. In 2025, it fell to 2.6%.
Switching back to 2021, QBE’s gross written LMI premiums were nearly $300 million. Even in the following year’s significant housing market downturn, gross written premiums came to $167 million, substantially above QBE's 2025 result amid a housing bull market.
LMI market's big test
With the housing market showing signs of cooling in 2026 amid higher interest rates, this year is shaping up to be a critical testing ground for the LMI market.
Helia’s annual results, due on Wednesday, 25 February, will hopefully provide further insights into the future of the LMI market.
Helia’s chief commercial officer Greg McAweeney told MPA that the full impact of the 5% Deposit Scheme on the LMI market will not be seen until this year, but “there is still good reason to feel cautiously optimistic”.
“Property buyers will continue to navigate affordability pressures, however we do expect demand for home ownership to remain strong, supported by a continued desire to enter or progress within the market.
“These conditions create an environment where LMI can play an important role in helping buyers move sooner, even when saving a large deposit is challenging,” he said.
McAweeney cited the strong rise in rentvesters and investors seeking alternative pathways as key LMI demographics.
“We will continue to watch how this plays out in 2026, however we continue to remain focused on what we do best which is helping people into homes sooner with the support of LMI,” he said.
