What Is PMI? Private Mortgage Insurance Explained
Private mortgage insurance, or PMI, commonly applies to conventional loans with a down payment below 20%. It protects the lender against specified default losses; it does not protect you from foreclosure or replace homeowners insurance.
How PMI affects costs
Premiums depend on factors such as loan-to-value ratio, credit and the insurance arrangement. Payment can be monthly, upfront or structured differently. Lender-paid coverage may be reflected in the interest rate. Compare the complete loan cost and cancellation provisions rather than assuming every PMI option works the same way.
Cancellation and termination differ
For many covered conventional loans, borrowers can request cancellation when the balance reaches 80% of the home’s original value, subject to conditions such as a written request, payment history and evidence concerning value and junior liens. Automatic termination generally occurs at the scheduled 78% point if payments are current; midpoint rules can also apply. Current market equity alone does not guarantee cancellation. Ask the servicer about your loan and any separate current-value options.
FHA mortgage insurance follows different rules
FHA mortgage insurance premiums are not conventional PMI. Duration depends on origination rules, original loan-to-value ratio and other factors; reaching 20% current equity does not by itself cancel FHA MIP. Review the applicable FHA terms with your servicer. Refinancing to a different loan requires qualification and costs, so removing insurance does not automatically make refinancing economical.
Plan your next step
For a purchase or refinance in Oregon or Washington, contact Platinum Lending Solutions to discuss your goals, documentation and available financing options. Eligibility, rates, costs and terms depend on your circumstances and lender requirements.
Related guidance: Conventional loan options.
Resource: CFPB PMI cancellation guidance.
Content reviewed October 10, 2026. Stacy Schlesinger | NMLS #252075.
