Purchase · 5 min read
What is private mortgage insurance and when can I stop paying it?
October 30, 2026 · Written by Bill Egan, NMLS 7342
Short answer
Private mortgage insurance, or PMI, is a monthly cost added when you put less than 20 percent down on a conventional loan. It protects the lender if you stop paying. You do not pay it forever. The law lets you request cancellation once you reach 20 percent equity based on the original value, and it must drop off automatically at 22 percent. We show the PMI amount on your Loan Estimate so you know the full payment before you write an offer.
01
Why this comes up
First-time buyers often hear they need 20 percent down and worry they cannot buy. When they put less down, the extra PMI payment shows up on the estimate and feels like a surprise fee that will never end.
02
Where this goes wrong
The deal stalls when the buyer sees the full payment with PMI and realizes they cannot afford it, or when they assume the insurance stays for the life of the loan and decide the house is out of reach.
03
What we do about it
We calculate the PMI cost on your specific file and show the payment with and without it. We also note the equity point where you can request removal so the number is clear before you make an offer.
04
How to get ready
Decide how much cash you can put down and how much room you have in your monthly budget. Bring two months of bank statements so we can confirm the down payment funds and price the PMI accurately.