PMI in San Diego: How Private Mortgage Insurance Works and When It Ends

by Trevor Landress

Private mortgage insurance, or PMI, is insurance you might have to buy on a conventional loan when your down payment is less than 20% of the purchase price. It protects the lender, not you, and under federal rules it can usually be removed once your balance falls to 80% of the home's original value and must end automatically at 78%.

The short answer

PMI protects the lender if you stop making payments. It does not protect you from foreclosure.
You can pay it monthly, as a one-time premium at closing, or as a combination of both.
You can ask your servicer to cancel it when your scheduled balance reaches 80% of the original value.
It must end automatically at 78%, or the month after the loan's midpoint, if you are current.

What PMI is

The Consumer Financial Protection Bureau explains that PMI is insurance a lender may require on a conventional loan with a down payment under 20% of the purchase price. The lender arranges it and private insurers provide it. The requirement can also apply when you refinance a conventional loan with less than 20% equity.

The CFPB's wording is clear that PMI protects the lender, not you, if you stop making payments. If you fall behind, you can still face foreclosure. What it can do is help you qualify for a loan with a smaller down payment than you might otherwise be able to use.

How you can pay for it

Monthly premium: added to your mortgage payment.
One-time up-front premium: paid at closing, and the CFPB notes it may not be refunded if you move or refinance.
A combination of an up-front premium and a monthly premium.

The CFPB page does not give a typical price range, so I am not going to guess one. It suggests asking lenders for total cost estimates over a few realistic timeframes, because the cheapest choice depends on how long you keep the loan. The cost belongs in your payment comparison, along with your rate and the other items I list in questions to ask a mortgage lender.

Ways to avoid it

The CFPB lists a few alternatives. One is a conventional loan with a smaller down payment that does not require PMI, usually at a higher interest rate. Another is a different loan type, such as an FHA loan, which may cost more or less depending on your credit score, down payment, lender and market conditions. A third is saving for a 20% down payment, which avoids PMI and may qualify you for a lower rate.

Which one is right depends on your numbers. I walk through the savings side in how much down payment you need and the assistance side in my down payment assistance guide.

When PMI can be removed

The CFPB page on removing PMI (last reviewed in August 2026) describes three points. These rules cover mortgages on single-family primary residences that closed on or after July 29, 1999, and FHA and VA loans have different requirements.

Point	What happens
80% of original value	You can ask your servicer to cancel PMI, in writing, if you are current, have a good payment history, certify there are no junior liens and show the home has not fallen below its original value
78% of original value	PMI generally must end automatically if you are current
Midpoint of the loan	PMI must end the month after the midpoint, which is after 15 years on a 30-year loan, if you are current

Original value is generally the lower of the contract sales price or the appraised value at purchase. You may be able to ask earlier if extra payments bring you to 80%, and the first eligible date appears on your PMI disclosure form.

An example with round numbers

Say a home's original value is $800,000. The 80% mark is $640,000 and the 78% mark is $624,000. On a loan that starts at 90% of that value, which is $720,000, you would need the scheduled balance to fall by $80,000 before you could ask to cancel, and by $96,000 before it ends on its own. This is only an illustration, and your servicer or lender can tell you the date for your loan.

What to do if you are buying now

Ask your lender which payment options for PMI are available, and ask how the cost compares to a higher rate with no PMI. Keep that answer next to your Loan Estimate, which I explain in how to read your Loan Estimate and Closing Disclosure. If a seller is offering a credit, ask how it fits with your loan, and see my seller credits guide for the limits. Then, once you own, put the 80% date on your calendar and ask your servicer how to request removal.

Investors such as Fannie Mae and Freddie Mac can set their own rules, but the CFPB says they cannot be less favorable to borrowers than the federal rules above.

My advice for San Diego buyers

Ask for total PMI cost over a few timeframes, not just the monthly figure.
Compare a PMI loan against a higher-rate loan with no PMI.
Find your 80% date on your PMI disclosure form and write it down.
Keep your payment history clean, since removal requires you to be current.
Ask your servicer in writing when you are ready to request cancellation.

A note on advice

I am a REALTOR®, not a lender, attorney, tax professional or financial advisor, so this guide is general information. Your lender can tell you what you qualify for, and a CPA or attorney can answer tax and legal questions.

Call or text me at (619) 402-4614 or send me a message.

Call or text (619) 402-4614 Contact Trevor Landress

Related guides

Frequently asked questions

What is PMI?

Private mortgage insurance is insurance a lender may require on a conventional loan with a down payment under 20%. It protects the lender, not the borrower.

How can I pay for PMI?

You can pay a monthly premium added to your mortgage payment, a one-time premium at closing, or a combination of both.

When can I ask to cancel PMI?

You can ask your servicer to cancel when the scheduled balance reaches 80% of the home's original value, if you are current and meet the other conditions.

When does PMI end automatically?

Servicers generally must end it when the scheduled balance reaches 78% of the original value, or the month after the loan's midpoint, if you are current.

Do FHA and VA loans follow the same PMI rules?

No. The CFPB says these removal rules apply to conventional single-family primary residence loans, and FHA and VA loans have different requirements.

About the author

Trevor Landress is a San Diego REALTOR® with Coldwell Banker West (DRE# 02126901). He was born and raised in San Diego and has been licensed since 2021.

Trevor helps homeowners sell, guides first-time buyers through the home buying process and assists investors with their next acquisition. His work includes negotiating offers, analyzing market trends, building pricing strategies and running marketing campaigns for his listings.

He serves clients across San Diego County, from coastal communities like La Jolla, Del Mar and Carlsbad to neighborhoods inland.

Trevor is part of the Campbell Group, a three-generation real estate team, and he and the Campbell Group consistently rank as a top producing team at Coldwell Banker West each month. He writes these guides to help San Diego buyers and sellers navigate an ever-changing market. To talk through your plans, call or text (619) 402-4614 or contact Trevor Landress.

How I help San Diego home buyers

I help buyers sort out their budget, understand their loan options with a lender, search for homes, write and negotiate offers, keep track of inspection and contingency deadlines and stay organized through closing.

How I help San Diego home sellers

I help sellers price their home, prepare it for the market, market it to buyers, review and negotiate offers and manage the steps from an accepted offer to closing.