Understand Private Mortgage Insurance, when it is required, typical costs, and how to remove it.
Try the Mortgage CalculatorWhy lenders require PMI
Private Mortgage Insurance protects the lender if you default on a conventional loan with less than 20% down. It does not protect you as the borrower, but it enables homeownership with a smaller upfront investment.
PMI is usually required until you reach 20% equity based on the original value, though appreciation and extra payments can accelerate removal. FHA loans use Mortgage Insurance Premium (MIP) with different rules and timelines.
Typical PMI costs
PMI typically costs 0.3% to 1.5% of the original loan amount per year, divided into monthly payments. On a $300,000 loan, that might mean $75 to $375 per month depending on credit score, down payment percentage, and loan type.
Our calculator estimates PMI when your down payment is below 20%. Enter your actual quote from a lender for the most accurate number — PMI rates vary significantly by borrower profile.
How to remove PMI
On conventional loans, request PMI cancellation when your balance reaches 80% of the original home value. It must automatically terminate at 78% if you are current on payments. A new appraisal can help if your home has appreciated quickly.
The fastest way to avoid or shorten PMI is a larger down payment. Putting 20% down eliminates PMI on conventional loans entirely and often secures a better interest rate.
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