PMI premiums typically run 0.3–1.5% of the loan amount per year, paid monthly with the mortgage. The borrower pays, but the lender is the beneficiary if the loan defaults.
Borrowers can request PMI cancellation once the LTV falls below 80% (through amortisation or appreciation); lenders must automatically cancel it at 78% LTV based on the original schedule. Avoiding PMI entirely is one of the biggest reasons US buyers stretch for a 20% down payment.
Beispiel
A buyer with a USD 300,000 loan and 10% down may pay PMI of about USD 125 per month (0.5% annualised); cancelling it after the loan amortises below 80% LTV saves USD 1,500 per year.