Private Mortgage Insurance (PMI)
mortgageAlso known as: PMI, mortgage insurance
Updated · Written and reviewed by Konstantin Iakovlev
Detailed explanation
PMI is required when down payment is less than 20% on a conventional loan. Cost typically ranges 0.5%-1% of loan amount annually — a $400K loan with 10% down might add $200-$330/month. Once you reach 20% equity (78% LTV per the Homeowners Protection Act), you can request PMI removal; at 22% equity it auto-cancels. FHA loans have separate Mortgage Insurance Premium (MIP) that's not removable except by refinancing to a conventional loan. VA and USDA loans have no PMI but may charge upfront funding fees.
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