What is PMI?

Private mortgage insurance, or PMI, insures the lender against any loss arising from the borrower's default. It should not be confused with mortgage life insurance, which pays all or a portion of your mortgage in the event of your death.

Lenders will usually require PMI for mortgages where the borrower puts down less than 20% to ensure that they will be able to recover their investment in case the borrower does not repay the loan. This insurance premium is paid by the borrower and is included