Definition
PMI stands for private mortgage insurance, commonly required on conventional loans with less than 20% down.
If you are comparing mortgage options, treat pmi as one piece of the total cost and risk picture, not a standalone detail.
Why It Matters
It matters because PMI can make buying with less cash possible while increasing monthly payment.
Simple Example
A $360,000 loan with a 0.50% PMI rate has an estimated monthly PMI cost of about $150.
How to Use This Term
When you see pmi on a loan estimate, calculator result, or lender conversation, connect it to three practical questions: how it affects monthly payment, how it affects cash needed now, and how it affects flexibility later.