Private Mortgage Insurance (PMI) is a type of insurance that borrowers must pay if they make a down payment of less than 20% on a conventional home loan. You may know that it protects the lender in case the borrower defaults on the loan. It is required until the borrower has built up sufficient equity in the property, reaching 20% ownership, in most cases. Remember, while PMI provides lenders with security, it adds to the borrower’s mortgage payment per month. Borrowers can request cancellation of PMI once they reach the required equity level.