Private mortgage insurance or PMI is a type of insurance your lender will require you to obtain if your down payment is under 20% of the price of the home.
PMI fees can range anywhere from approximately .3% to 1.15% of the original loan amount, per year.
As of 2013, mortgage insurance is still tax-deductible!
It’s a good idea to keep track of your payments on the principal of your loan because when you reach 80% equity, or have paid off 20% of the principal, then you can cancel your PMI by notifying your lender. If you are considered a high-risk borrower then lenders may be able to require you keep the PMI until you have achieved 50% equity.