Private mortgage insurance (PMI) protects your lender if you stop making payments. It does not prevent foreclosure or replace homeowners insurance. Conventional loans often require it with less than 20% down, or less than 20% equity when refinancing. The CFPB explains when PMI applies.
Where to find your PMI cost
For monthly PMI, look at the Projected Payments section on page 1 of your Loan Estimate or Closing Disclosure. Some policies charge an upfront premium, or combine upfront and monthly charges. The upfront amount appears in section B on page 2. Check the payment structure when comparing Loan Estimates; an upfront premium may not be refundable when you refinance.
These disclosure locations and payment options are described in the CFPB's PMI guide. Use the premium quoted for your loan rather than treating an online percentage as your price.
A monthly-premium example
Assume a $350,000 purchase, a $52,500 down payment, and a quoted annual PMI rate of 0.55% applied to the initial loan amount. These are illustrative inputs, not an insurance quote.
| Calculation | Amount |
|---|
| Loan amount: $350,000 minus $52,500 | $297,500 |
| Annual premium: $297,500 × 0.0055 | $1,636.25 |
| Monthly premium: $1,636.25 ÷ 12, rounded | $136.35 |
That $136.35 would be added to principal and interest. Property taxes and homeowners insurance are separate expenses. Your policy determines the actual premium and whether it changes; this example does not calculate a lifetime PMI cost or cancellation date.
When PMI can end
Cancellation depends on your loan's rules, payment record, and the value used to measure equity. Our guide to removing PMI without refinancing explains borrower-requested cancellation, scheduled automatic termination, current-value reviews, and the cost of replacing your loan. It also separates conventional PMI from FHA mortgage insurance.
Before putting more cash into a down payment or principal payment, compare the quoted PMI cost with the cash you would have left for repairs and other expenses. Ask your servicer for the cancellation requirements in writing before paying for a valuation.
