Explainer
Private mortgage insurance explained
Learn what private mortgage insurance is, who it protects, how the premium shows up on your loan papers, and when it ends as the balance comes down.
Satisfy+ Editorial · Published August 6, 2026 · 2 min read
This is general education, not individual financial, investment or tax advice.
At a glance
- When it applies
- A conventional loan with less than 20 percent down
- Who it protects
- The lender, not you
- How it's paid
- Monthly, upfront at closing, or both
- When it ends
- Once the balance is paid down far enough
Private mortgage insurance, or PMI, is a kind of mortgage insurance. It often comes with a conventional loan when the down payment is less than 20 percent of the purchase price. It usually applies to refinancing a conventional loan too, when your equity is less than 20 percent of the home's value. The lender arranges it, and private insurance companies provide it.
Who it protects
PMI insures the lender against loss when a borrower stops making payments. It doesn't protect you. If you fall behind on the mortgage, you can still lose the home through foreclosure. PMI can help you qualify for a loan you might not otherwise get, and it adds to the cost of the loan.
How it's paid
- A monthly premium. This is the most common way. It's added to the mortgage payment and shows in the Projected Payments section on page 1 of the Loan Estimate and Closing Disclosure.
- An upfront premium. A one-time premium paid at closing, shown in section B on page 2 of both forms. If you move or refinance after paying it, you might not get any of it back.
- Both. You pay an upfront premium plus a monthly one.
Reading a mortgage loan estimate covers where each line appears on the form.
When PMI ends
- Asking to cancel. You can ask the servicer to cancel PMI once the loan balance is paid down far enough. The first date appears on the PMI disclosure form from your closing papers, and extra payments can bring it sooner. The servicer can tell you what the request needs, such as a good payment history or evidence that the home's value hasn't dropped.
- Ending on its own. PMI also ends by itself later in the loan, if you're current on payments.
- Other loans. FHA and VA loans have their own mortgage insurance or fees and their own rules, and so does mortgage insurance the lender pays for. The servicer can explain how yours ends.
An annotated example
What to do next
Find the PMI disclosure form in your closing papers and note the first date you can ask to cancel. Check each year's mortgage statement for the premium until it stops.
Keep track of the mortgage insurance
- Find the PMI disclosure form from the closing papers
- Find the PMI cancellation date on the closing papers
- Check the mortgage statement for the PMI premium
FAQ
Does private mortgage insurance protect me?
No. It protects the lender if you stop making payments. You can still lose the home through foreclosure if you fall behind.
When does PMI go away?
You can ask the servicer to cancel it once the balance is paid down far enough, from the date on the PMI disclosure form. It also ends on its own later if you're current on payments.
Sources
Checked October 20, 2026
- Consumer Financial Protection Bureau. What is private mortgage insurance? (2023)
- Consumer Financial Protection Bureau. When can I remove private mortgage insurance (PMI) from my loan? (2026)
- Buying
- Mortgage
- Insurance cost
