What Is PMI?
5 min read · Updated 2026-08-01
Private mortgage insurance: who pays it, how much it costs, and how to remove it.
What it is
Private mortgage insurance protects the lender, not you, if you default. It is normally required on conventional loans when the down payment is under 20% of the purchase price.
Costs commonly range from about 0.3% to 1.5% of the loan amount per year, driven by credit score and loan-to-value ratio.
Getting rid of it
You can generally request cancellation once the loan balance reaches 80% of the original value, and lenders must automatically terminate it at 78% under federal rules for qualifying loans. Appreciation-based removal may be possible with a new appraisal.
FHA is different
FHA loans carry a separate mortgage insurance premium that, for most modern loans with low down payments, lasts the life of the loan. Removing it usually means refinancing into a conventional loan.
This guide is general information, not financial, tax, or legal advice. Figures are estimates and vary by lender, insurer, and location.
Keep reading
- What Is a Down Payment?
Why the down payment matters beyond the headline percentage.
- How Much House Can I Afford?
How lenders size a loan, and why their answer differs from your comfortable answer.