PMI (Private Mortgage Insurance)
Insurance a lender requires when your mortgage down payment is under 20%, protecting the lender if you default.
What does pmi mean?
PMI is typically required while your loan-to-value is above 80% and usually costs 0.3%–1.5% of the loan per year. It protects the lender, not you, and generally drops off automatically once you reach 22% equity.
Put it to use
Mortgage Calculator with PMI Use this calculator to determine your total monthly mortgage payment including and estimated amount for Private Mortgage Insurance (PMI). Combination Mortgage Calculator Use this calculator to compare one mortgage with combination financing that consist of a first and second mortgage.
Related terms
PMI — frequently asked
How do I get rid of PMI?
On most conventional loans PMI automatically ends once your balance reaches 78% of the home’s original value, and you can request cancellation at 80%. Paying down principal faster, or a new appraisal after your home gains value, can remove it sooner.
How much does PMI cost each month?
PMI typically runs about 0.3%–1.5% of the loan amount per year, billed monthly. On a $300,000 loan that is roughly $75–$375 a month, with the rate depending mainly on your credit score and down-payment size.