How Much Is PMI (Private Mortgage Insurance)? What You Need to Know

If you buy a house with less than 20% down, you're likely going to pay PMI (private mortgage insurance). It's an insurance policy for the lender just in case you default on the loan.

PMI is applied to conventional loans when you don't have 20% equity in the home. It's automatically canceled once you reach 22%. But that can take up to 6.5 years of regular mortgage payments.

You can pay it in your monthly premium or through an upfront premium. Sometimes you can pay monthly and a portion upfront.

When do you pay PMI?

PMI is calculated as a percent of the purchase price as set by the lender. It can range from 0.58% to 1.86% of the loan. There are several online calculators to help get an estimate.

How much is PMI?

Basically you need a down payment of 20% or more or you have a high-interest loan. Some people take out a second loan to make a larger downpayment then pay down that loan quicker.

How to avoid paying PMI?

It's automatically removed once you reach 20% equity in the home. Or you can have your home audited to show that you have reached 22% equity. Lastly, you can refinance.

How do you get rid of your PMI payment?

Nobody wants an additional payment. Look for ways to save for a down payment and make sure that you're only buying a home that you can afford.


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