Private Mortgage Insurance (PMI)
Insurance that protects the lender, not you, on a conventional loan with less than 20% down. It's added to your monthly payment and can be cancelled once you build enough equity.
Last updated: October 3, 2026PMI is insurance you pay for and the lender collects on. You might be required to buy it when you take out a conventional loan with less than 20% down, and it protects the lender if you stop paying. It does not protect you: fall behind and you can still lose the apartment to foreclosure. The upside is that it can get you a loan you otherwise couldn’t, which in a city where 20% of an NYC condo price is a serious pile of cash is not nothing.
Most borrowers pay PMI as a monthly premium added to the mortgage payment (shown on page 1 of the Loan Estimate). Some lenders offer a one-time upfront premium at closing, or a mix of both, and some offer a no-PMI loan at a higher interest rate instead. If you pay upfront and then sell or refinance, you may not get any of it back.
PMI is not forever. For a single-family principal residence loan closed on or after July 29, 1999, you can generally ask your servicer in writing to cancel it once the balance is scheduled to hit 80% of the home’s original value (the lower of the contract price or the purchase appraisal), provided you’re current, have no second lien, and the value hasn’t dropped. The servicer generally must end it automatically when the balance is scheduled to hit 78%, or at the loan’s midpoint, whichever comes first. FHA and VA loans follow different rules.
Worked example
An $800,000 condo with 10% down means a $720,000 loan. This site’s calculators use an illustrative PMI rate of 0.70% a year at 10-15% down (not a quote; your rate depends on credit score and the insurer), so PMI runs $720,000 × 0.70% = $5,040 a year, or $420 a month on top of principal and interest. At this site’s default 6.95% rate on a 30-year loan with no extra payments, the balance is scheduled to reach 80% of the $800,000 price ($640,000) after 100 payments, about 8 years 4 months, and 78% ($624,000) after 115 payments. Extra principal payments pull the request date earlier.
See how PMI moves your maximum price on the Condo Calculator, or read PMI on NYC condos for the rate tiers by down payment.