Private mortgage insurance (PMI) is required on conventional loans when the borrower puts down less than 20% of the purchase price. PMI protects the lender, not the borrower, against losses if the loan goes into default. Monthly PMI premiums typically range from 0.5% to 1.5% of the original loan amount annually, depending on the LTV ratio and borrower's credit score. For investor-occupants using house hacking strategies with conventional financing, PMI is a common cost that can be removed once the loan balance drops below 80% of the property's value. FHA loans require mortgage insurance for the life of the loan regardless of equity.