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Mortgage Glossary

PMI (Private Mortgage Insurance)

Mike Starr·Reviewed August 2026

Private Mortgage Insurance is required by lenders when a borrower makes a down payment of less than 20% of the home's purchase price on a conventional loan. PMI protects the lender if the borrower defaults. It typically costs between 0.3% and 1.5% of the original loan amount per year and can be removed once the borrower reaches 20% equity.