Definition, Meaning & Synonyms

PMI

noun

ˈpiːˌɛmˈaɪ

Definition

PMI stands for Private Mortgage Insurance, a type of insurance that protects lenders in case a borrower defaults on their loan.

Examples

If you put down less than 20%, you may be required to pay PMI on your mortgage.
Many homebuyers try to avoid PMI by saving for a larger down payment.
PMI can increase your monthly mortgage payments, so it’s important to factor that into your budget.

Meaning

It is commonly required for borrowers who make a down payment of less than 20% of the home’s purchase price, ensuring that the lender is safeguarded against potential losses.