Private mortgage insurance is required by most conventional lenders when your down
payment is less than 20% of the home price. It protects the lender — not you — if you
default. Premiums range from roughly 0.3% to 1.5% of the loan amount per year, depending
on credit and how much you put down.
PMI is temporary. By federal law it must drop off automatically when your loan balance
hits 78% of the home's original value, and you can request cancellation at 80%. The
estimate above is conservative — it assumes the PMI rate stays constant until you reach
22% equity.