Definition
Insurance required by conventional lenders when the down payment is less than 20%, cancellable as equity builds.
Example
PMI of $148 monthly cancelled automatically once the balance reached 78% of original value.
Related terms
- Acceleration Clause
- Accrued Interest
- Adjustable Rate Cap
- Adjustable-Rate Mortgage
- Amortization
- Annual Percentage Rate
Frequently asked questions
What does Private Mortgage Insurance mean in real estate?
Insurance required by conventional lenders when the down payment is less than 20%, cancellable as equity builds.
How is Private Mortgage Insurance used in practice?
PMI of $148 monthly cancelled automatically once the balance reached 78% of original value.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.