Name: Kay Houghton & Associates
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Private Mortgage Insurance, or PMI, is a common part of many home loans, especially for buyers who put down less than 20% on a conventional mortgage. While it may feel like just another added expense, understanding PMI can help you plan ahead and know when you’ll be able to remove it.

What is PMI?

PMI is insurance that protects the lender in case a borrower defaults on their loan. It does not benefit the homeowner directly, but it does make it possible for buyers to purchase a home with a smaller down payment.

How Much Does PMI Cost?

The cost of PMI is typically rolled into your monthly mortgage payment. The exact amount depends on your loan size, down payment, and—most importantly—your credit score. In general, the higher your credit score, the lower your PMI cost.

How to Remove PMI

PMI isn’t permanent. Here are the main ways it can be removed:

Automatic cancellation: By law, lenders must cancel PMI once your loan balance drops to 78% of your home’s original value, as long as you’re current on payments.

Borrower request: You can request removal when your balance reaches 80% of the original home value.

Appraisal-based removal: If your home value has gone up, you may be able to remove PMI sooner with a new appraisal showing sufficient equity.

How Long Does PMI Last?

With a 10% down payment, PMI often falls off automatically in about 3 to 3.5 years, assuming regular payments and no additional principal contributions. Paying extra toward your principal can shorten this timeline even further.

PMI is simply a stepping stone on the path to homeownership. If you’d like to talk through your options or find strategies to reduce your PMI sooner, give me a call – I’d be happy to help.