PMI Explained: How to Avoid Paying It in 2026
If you buy with less than 20% down on a conventional loan, you'll likely pay Private Mortgage Insurance (PMI). On a $300,000 loan, that's roughly $125 to $375 per month — money that protects your lender, not you. The good news: PMI is temporary, and there are proven ways to avoid or remove it.
What PMI Actually Is
PMI is insurance your lender requires when your loan-to-value (LTV) ratio is above 80%. It reimburses the lender if you default. It does not protect you and does not build equity. Per Freddie Mac, expect to pay roughly $30–$70 monthly for every $100,000 borrowed.
Estimated Monthly PMI by Loan Size
| Loan amount | Low (~0.5%) | Typical (~1%) | High (~1.5%) |
|---|---|---|---|
| $150,000 | ~$63 | ~$125 | ~$188 |
| $250,000 | ~$104 | ~$208 | ~$313 |
| $300,000 | ~$125 | ~$250 | ~$375 |
| $400,000 | ~$167 | ~$333 | ~$500 |
How to Avoid PMI Entirely
- Put down 20% or more — no PMI from day one.
- Piggyback loan (80-10-10) — a second loan keeps your first mortgage at 80% LTV.
- Lender-paid PMI (LPMI) — baked into a higher rate; run the numbers first.
- VA loan (if eligible) — 0% down, no PMI (funding fee applies).
How to Remove PMI You Already Pay
Under the federal Homeowners Protection Act, for conventional loans on a primary residence:
- Request cancellation at 80% LTV — in writing, once you reach 20% equity.
- Automatic termination at 78% LTV — your servicer must cancel it, if payments are current.
- Pay down principal faster — extra payments reach 80% sooner.
- Order a new appraisal — if your home appreciated, you may hit 80% on current value.
- Refinance — if you now have 20%+ equity (weigh closing costs).
Note: FHA and VA loans follow different rules — FHA insurance often lasts 11 years or the life of the loan depending on your down payment.
See PMI's Impact on Your Payment
Toggle PMI on and off in our Mortgage Calculator, or use the Refinance Calculator to check if refinancing to drop PMI makes sense.
Disclaimer: This article is educational only and not financial, legal, or tax advice. Consult a licensed mortgage professional before making decisions.