What is What Is Private Mortgage Insurance?
Private mortgage insurance, or PMI, is an insurance policy conventional lenders require when a borrower puts less than 20% down. It protects the lender from default, costs 0.3–1.5% of the loan yearly, and drops off automatically at 78% loan-to-value under federal law.
Practical Example
When a U.S. consumer researches private mortgage insurance, understanding the mechanics up front helps them compare providers, avoid hidden fees and choose the option that best fits their budget and long-term goals.
Why It Matters
Getting private mortgage insurance right can save households hundreds to thousands of dollars each year and prevents disputes that end up in state regulator complaints or court.
Frequently Asked Questions
Because it affects the price you pay, the protections you keep and the options you have — details that shift with each new regulatory cycle.