Financing

Private Mortgage Insurance (PMI)

Insurance protecting the lender when down payment is less than 20%.

Reviewed 9 August 2026 by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Adds 0.3-1.5% annual cost. Drops automatically at 78% LTV.

Examples

$200k loan × 0.7% PMI = $1,400/yr.
FHA equivalent is MIP — doesn't drop without refinance.

Common mistakes

Forgetting PMI in cash flow models.

Private Mortgage Insurance (PMI)

Plain-English explanation

Examples

Common mistakes

Related questions