06/23/2026
๐๐ฐ๐ ๐๐๐ ๐๐๐๐...
Lenders generally charge ๐ธ Private Mortgage Insurance (PMI) on conventional loans if your down payment is less than 20% of the homeโs purchase price, or if your loan-to-value (LTV) ratio is higher than 80%.
๐๐ก๐๐ญ ๐ข๐ฌ ๐๐ซ๐ข๐ฏ๐๐ญ๐ ๐๐จ๐ซ๐ญ๐ ๐๐ ๐ ๐๐ง๐ฌ๐ฎ๐ซ๐๐ง๐๐?
PMI is a monthly insurance premium that is placed on a loan by a lender. It protects lenders if a borrower defaults on a conventional loan.
Although you pay the premium, PMI doesn't provide ๐๐๐ protections for ๐๐๐ ๐ซต๐พ as the homeowner. Its a bank ๐ฆ GOTCHA fee ๐
PMI only protects the lender in the event you stop making payments.
The requirement to buy PMI usually also applies to REFINANCING a conventional loan, when your equity is less than 20 percent of the value of your home.
FHA loans always require mortgage insurance (often called MIP) regardless of your down payment.
VA loans do not charge monthly mortgage insurance, while USDA loans charge a similar annual guarantee fee.
PMI is typically bundled into your monthly mortgage payment (costing roughly 0.46% to 1.5% of the loan amount annually.
For example, a $300,000 mortgage ๐ , this adds about $1,380 to $4,500 ๐ธ per year (or roughly $115 to $375 per month ๐ธ) to your mortgage payment.
You can usually request to cancel PMI once your home equity reaches 20% (i.e., your loan balance is 80% of the home's original value), However, a FHA loan often require the fee for the life of the loan.
