Is private mortgage insurance (PMI) required if you put less than 25% down on your first home?
Short answer: No—PMI isn’t automatically required if you put less than 25% down.
But here’s the part most first‑time buyers don’t realize: PMI is typically required when you put less than 20% down on a conventional loan, not 25%.
So where does that “25%” idea come from?
Some lenders offer slightly better interest rates or lower fees when you put 25% down, but that’s about pricing—not PMI rules.
Let’s break it down in plain English:
When PMI Is Required
If you’re using a conventional loan and your down payment is under 20%, your lender will almost always require PMI. It’s simply their way of reducing risk when buyers have lower equity starting out.
When PMI Isn’t Required
You won’t need PMI if:
- You put 20% or more down on a conventional loan
- You use a VA loan (no PMI at all—one of the best perks for eligible buyers)
- You choose certain lender‑paid PMI or piggyback loan options
- You qualify for special first‑time buyer programs that waive or reduce PMI
A Quick Tip for First‑Time Buyers
PMI isn’t always the villain it’s made out to be.
For many buyers, PMI is what allows them to get into a home sooner instead of waiting years to save up 20%. And you can usually remove PMI once your home reaches 20% equity—either through payments or appreciation.
Bottom Line
Putting less than 25% down doesn’t automatically trigger PMI.
It’s the 20% mark that matters.
If you’re under that threshold on a conventional loan, PMI is likely—but there are plenty of ways to reduce it, remove it, or avoid it altogether depending on your loan type and program.