Only applicable on loans 75% of the purchase price/value or above. This is an insurance the lender takes out against you defaulting on your mortgage. The premium can usually be added to the mortgage, in which case you will be paying interest on it for however long you have the mortgage. Alternatively, many lenders give you the option to pay the premium in twelve monthly instalments during the first year, or the premium could be paid off in a lump sum at the start of the mortgage. Some lenders do not now charge you an indemnity premium, instead electing to pay the premium themselves.