Insurance required by conventional lenders when the down payment is less than 20%. PMI protects the lender if you default. Monthly PMI costs 0.3% to 1.5% of the loan amount annually. Unlike FHA MIP, conventional PMI cancels automatically when you reach 78% LTV. You can also request cancellation at 80% LTV.
Definition reviewed by Renzo Johnson, Licensed MLO, NMLS #PENDING. Last updated February 2026.