FAQ Mortgage Insurance

Mortgage insurance is based on your loan amount. To estimate how much you’ll pay for mortgage insurance, you’ll first need to calculate your loan-to-value (LTV) ratio. To do this, divide your loan amount by your property value. You’ll then multiply this by your PMI percentage, which your lender can provide.PMI percentages can range from 0.22% on the low end up to 2.25% on the high end—you can use these percentages if you don’t have your PMI percentage from your lender.

You might have to pay both mortgage insurance and homeowners insurance—but while they might sound similar, they’re actually quite different.Mortgage insurance: protects the lender if a borrower defaults on their loan.Homeowners insurance: protects the homeowner in case of damage to your house or belongings.

While homeowners were previously allowed to deduct mortgage insurance premiums from their taxes in some cases, this deduction expired following the 2021 tax year.

If you’re getting a conventional mortgage and your down payment is less than 20%, you’ll likely have to pay for PMI. But if you’re able to put at least 20% down, you can avoid mortgage insurance.For FHA loans, mortgage insurance is unavoidable.