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What is private mortgage insurance (PMI)?

Private Mortgage Insurance (PMI) is an insurance policy, separate from homeowner's hazard insurance coverage, that is usually required by the lender if the down payment is less than 20 percent of the sales price or appraised value of the house. PMI protects the lender from the risk of loss if you default on your mortgage, and the premiums are typically paid monthly by the borrower. In many cases, PMI is no longer required once the borrower has made enough timely mortgage payments such that the borrower has sufficient equity in the property.

Last Reviewed: April 2021

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on should not be construed as legal advice or a legal opinion of the OCC.

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