Private Mortgage Insurance (PMI) (PMI)
Direct definition
Mortgage insurance on conventional loans, typically required when LTV exceeds 80%.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
PMI protects the lender if you default. Borrowers can request cancellation at 80% LTV and lenders must automatically terminate at 78% LTV under most conditions.
Why it matters
Getting PMI removed can save hundreds of dollars per month.
Where you may see it
- Loan Estimate
- Closing Disclosure
- Mortgage statement
- Escrow analysis
A real-world example
A $360,000 loan on a $400,000 home carries PMI until the balance drops to $320,000 (80% LTV).
Educational and illustrative only
A common misunderstanding
PMI doesn't protect the borrower if they can't pay — it protects the lender, and it isn't the same product as homeowners insurance.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026