How PMI works
Private mortgage insurance protects the lender, not you, when you put down less than 20% on a conventional loan. Your cost depends on loan-to-value (LTV), credit score and loan type. Insurers price PMI per loan and do not publish current rate cards, so these figures are estimates built from typical market ranges (for reference, one major insurer's older published card ran from about 0.25% to 0.90% a year at 85% to 90% LTV, depending on credit score). Your lender's actual quote will differ.
| LTV at closing | Typical annual PMI (good credit) |
|---|---|
| 95.01% – 97% | 0.6% – 1.2% |
| 90.01% – 95% | 0.4% – 0.9% |
| 85.01% – 90% | 0.3% – 0.6% |
| 80.01% – 85% | 0.2% – 0.4% |
Removing PMI: 80% vs. 78%
The Homeowners Protection Act lets you request cancellation once your balance reaches 80% of the original value, provided you have a good payment history and no junior liens. At 78%, the lender must cancel automatically. If your home has appreciated, you can ask for cancellation based on current value, which usually requires an appraisal.