private mortgage insurance rates

Private Mortgage Insurance Rates Overview

Private mortgage insurance plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership. With this type of insurance, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment.

Currently, the monthly premium for Private mortgage insurance for the first 20 years of a 30-year mortgage varies with the size of the down-payment. For a mortgage with a loan-to-value ratio of 95% (a down-payment of 5%), a typical monthly PMI premium is 0.78%/12 of the initial mortgage amount. A 90% loan-to-value ratio (a down-payment of 10%) requires a monthly premium of 0.52%/12 of the initial mortgage amount, and a mortgage with a 85% loan-to-value ratio (a down-payment of 15%) requires a monthly premium of 0.32%/12 of the initial mortgage amount. Beyond 20 years, the monthly PMI premium changes to 0.20%/12 of the initial mortgage amount, regardless of the size of the down-payment. In each case, the insurer normally collects an escrow equal to two months' premium at the beginning of the mortgage.

Canceling Private Mortgage Insurance

you have the right to request cancellation of PMI when you pay down your mortgage to the point that it equals 80 percent of the original purchase price or appraised value of your home at the time the loan was obtained

Automatic Termination. mortgage lenders must automatically cancel PMI coverage on most loans, once you pay down your mortgage to 78 percent of the value if you are current on your loan. Lenders must terminate the coverage within 30 days of cancellation or the automatic termination date, and are not permitted to require PMI premiums after this date.