The full explanation
It is normally paid monthly as part of your payment, and the cost depends on your credit score and how much you put down. Unlike FHA insurance, PMI can be canceled once your balance falls far enough relative to the home's value; the lender must explain the rules to you.
An example
Gabriela bought with a small down payment and pays PMI every month. Years later, as her balance drops, she asks the lender to cancel it and her payment goes down.
With real numbers
Computed with official data for the whole U.S. In your county the numbers may differ.
- Down payment for no PMI (20%)
- $66,540
- Balance where it ends on its own (78%)
- $259,506
A conventional loan carries PMI when you put less than 20% down. On a $332,700 home, the typical U.S. value, that is $66,540. If you put less, the law requires PMI to end when your balance is scheduled to reach $259,506 (78% of the original value), as long as you are current.
Computed with: American Community Survey (ACS) 5-year estimates (2020–2024) · Fannie Mae Selling Guide B7-1-01 — Provision of Mortgage Insurance (October 17, 2026) · Homeowners Protection Act of 1998, 12 U.S.C. §4902 (October 9, 2026)
You will see it in…
- The Loan Estimate (“Mortgage Insurance” in the projected payments)
- The lender's annual notice about your right to cancel PMI
- Monthly statements
