Home Buying

What Is PMI?

Private mortgage insurance (PMI) is insurance that protects the lender, not the borrower, if a borrower stops paying a conventional US mortgage. It is usually required when the down payment is less than 20% of the home's price, and its cost is typically added to the monthly mortgage payment.

How Much PMI Costs

PMI is commonly quoted as an annual percentage of the loan amount, often somewhere around 0.3% to 1.5%, depending on the down payment, credit profile, and loan type.

When PMI Ends

Under the US Homeowners Protection Act, borrowers can request cancellation once the loan balance reaches 80% of the home's original value, and it generally ends automatically at 78%, provided payments are current. Government-backed loans such as FHA loans have their own mortgage insurance rules.

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.