Costs & PMI
What is mortgage insurance and how much does it cost?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Mortgage insurance protects the lender when you put down less than 20%. Conventional PMI runs about 0.3% to 1.5% of the loan per year; FHA charges an upfront 1.75% premium plus an annual premium around 0.55%.
Conventional PMI is removable at 20% equity; FHA's annual premium usually lasts the life of the loan unless you refinance out. We compare the total insurance cost of each program, not just the rate.
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