StonePathHome Homeownership clarity
Buyer guide

Helping you understand the true cost of homeownership

Private mortgage insurance, often called PMI, is an extra cost that can be added to a conventional mortgage when the down payment is small.

How PMI works

Understand why PMI shows up, what it affects, and why it changes affordability more than many buyers expect.

What PMI is

PMI protects the lender, not the borrower. It is commonly required when a buyer puts down less than 20 percent on a conventional loan. Even though it does not directly benefit the borrower, it can still help buyers access homeownership sooner with a smaller down payment.

Why it matters

PMI increases your monthly housing cost, which means it directly affects affordability. A home that looks manageable on principal and interest alone may feel tighter once PMI is included.

When it can go away

Depending on the loan and lender rules, PMI may eventually be removed after the loan balance reaches a certain percentage of the home value. Buyers should understand those rules before assuming the cost is permanent.

Planning tip

If you expect PMI, include it in your monthly estimate from the beginning. The StonePathHome mortgage calculator includes a monthly PMI field specifically for that reason.