Private mortgage insurance (PMI) protects the lender, not you, when you put down less than 20% on a conventional loan. It usually costs about 0.3% to 1.5% of the loan a year, depending on your credit score and down payment, and is added to your monthly payment. Unlike FHA mortgage insurance, PMI goes away: you can ask to remove it at 20% equity, and it ends automatically at 22% equity based on your original payment schedule.
What it costs
PMI pricing depends mostly on your credit score and how much you put down. On a $350,000 loan, 0.5% a year is about $146 a month; at 1% it’s about $292.
Try it: PMI calculatorEstimate your mortgage insurance for your price, down payment and credit score, and see how long you’d pay it.PMI vs. FHA mortgage insurance
| Conventional PMI | FHA mortgage insurance (MIP) | |
|---|---|---|
| Upfront cost | Usually none | 1.75% of the loan, usually added to the loan |
| Yearly cost | About 0.3% to 1.5%, lower with better credit | 0.55% for most loans, the same for most credit scores |
| When it ends | Request at 80% loan-to-value; automatic at 78% | After 11 years with 10%+ down; otherwise for the life of the loan |
For buyers with good credit, conventional PMI is often cheaper and ends sooner. With a lower score, FHA can cost less. Compare both with FHA vs. conventional.
How to get rid of PMI
- Request it at 20% equity (80% of the original value) if you have a good payment history.
- Automatic removal at 22% equity (78% of the original value) on your scheduled payments.
- Prepay principal to get there sooner; see the extra payment calculator.
- Use a higher home value: if your home has gained value, many lenders will drop PMI based on a new appraisal, often after two to five years of ownership.
See when you’ll reach each milestone with the remove mortgage insurance tool.
Is paying PMI worth it?
Often, yes. Waiting years to save 20% can cost more than PMI, especially if home prices rise while you save. On a $350,000 home, buying with 5% down might cost about $150 to $250 a month in PMI for several years, while prices rising 4% a year would add $14,000 to the price in a single year. Run both scenarios with the down payment timeline.
Other ways to avoid it
- VA loans have no monthly mortgage insurance.
- Lender-paid PMI folds it into a slightly higher rate; it can’t be removed later, so it works best if you won’t keep the loan long.
- Some first-time buyer and credit union programs waive or reduce PMI.
Common questions
How much is PMI per month?
Usually about 0.3% to 1.5% of the loan a year, depending on your credit score and down payment. On a $350,000 loan, 0.5% is about $146 a month.
When does PMI go away?
You can request removal when your loan reaches 80% of the original value, and it ends automatically at 78% if you’re current on payments.
Is it better to wait until I have 20% down?
Often not. PMI is temporary, while waiting can cost more if prices rise. Compare both with your own numbers.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.