What is private mortgage insurance and do I have to pay it?

PMI protects the lender against default risk, not you directly. On many conventional mortgages covered by federal cancellation rules, borrowers can request cancellation when the principal balance reaches 80% of the home's original value, subject to requirements such as a satisfactory payment history and any applicable evidence that the property's value has not declined. Automatic termination generally occurs when the scheduled balance reaches 78% of the original value, provided the borrower is current on payments. A new appraisal is not automatically required for either standard threshold, and different rules may apply to other cancellation methods or loan types. FHA loans use mortgage insurance premiums rather than conventional PMI. Their duration depends on factors including the loan's origination date, original loan-to-value ratio, and loan term. Ask your lender to explain the requirements that apply to your specific mortgage.