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Math of Money

Is 20% Down Still the Rule? What PMI Really Costs

What private mortgage insurance costs, when it goes away, how to cancel it early, and whether it's worth waiting to save a 20% down payment before you buy.

By S M Ariful Islam ShawonUpdated 4 min read

Frequently asked questions

How much is PMI per month?

Freddie Mac says borrowers typically pay about $30 to $70 per month for every $100,000 borrowed. Your actual premium depends mostly on your credit score and down payment, and it's listed on your Loan Estimate.

When does PMI come off automatically?

Under the Homeowners Protection Act, your servicer must cancel PMI when your balance is scheduled to reach 78% of the home's original value, as long as you're current on payments. It also must end the month after the midpoint of the loan term, such as after 15 years on a 30-year loan.

Can I remove PMI early if my home's value went up?

Many servicers will consider it, but the Homeowners Protection Act's 80% rule is based on the original value. Removal based on a new appraisal depends on your servicer's and investor's rules, which often require the loan to be at least two to five years old and a lower loan-to-value ratio. Ask your servicer for its requirements in writing.

Is PMI tax deductible?

The rules have changed over the years. The deduction lapsed after the 2021 tax year, and the One Big Beautiful Bill Act (P.L. 119-21) treats mortgage insurance premiums as deductible mortgage interest again starting in 2026. It only helps if you itemize deductions, so check IRS Publication 936 for your filing year.

Is FHA mortgage insurance the same as PMI?

No. FHA loans have their own mortgage insurance premium (MIP), set by HUD, with an upfront charge and annual premiums that often last for the life of the loan. The Homeowners Protection Act's cancellation rules apply to conventional loans with PMI.

Calculators used in this guide

Sources

Disclaimer: This guide is general education, not financial, tax, or legal advice. Examples use round, hypothetical numbers; your results depend on your own loan terms, taxes, and circumstances. See oureditorial policy for how guides are written and corrected.

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