What is Private Mortgage Insurance (PMI)?
Insurance protecting lenders on conventional loans with under 20% down. Costs 0.5-1.5% annually. Removable at 20% equity.
Private mortgage insurance (PMI) protects the lender if you default on a conventional loan with less than 20% down payment. PMI typically costs 0.5-1.5% of the loan amount annually, added to your monthly payment. PMI can be removed once you reach 20% equity (and must be automatically cancelled at 22%).