Quick Answer: Private mortgage insurance (PMI) is a monthly fee — typically $80 to $350 per month — that lenders charge when your down payment is less than 20%. PMI protects the lender, not you. In Utah, you can avoid PMI by: putting 20% down, using a VA loan (no PMI ever), choosing a Utah Housing NoMI loan, using a piggyback 80-10-10 loan, or requesting PMI removal once you reach 80% loan-to-value through payments or home appreciation.
How Much Does PMI Cost in Utah?
PMI costs vary based on your credit score, down payment, and loan amount. For a typical Utah purchase:
| Loan Amount | Down Payment | Credit Score | Estimated Monthly PMI |
|---|---|---|---|
| $400,000 | 5% | 720+ | $95-$130 |
| $400,000 | 5% | 680-719 | $140-$200 |
| $400,000 | 5% | 640-679 | $200-$300 |
| $400,000 | 10% | 720+ | $65-$90 |
| $400,000 | 3% | 720+ | $130-$170 |
5 Ways to Avoid PMI in Utah
- Put 20% down: The traditional route — on a $450,000 home, that's $90,000. Most buyers can't do this, but it eliminates PMI entirely.
- VA loan: Veterans and active military never pay PMI on VA loans, regardless of down payment. This saves $100-$300/month.
- Utah Housing NoMI loan: UHC's NoMI program has a slightly higher rate but no mortgage insurance — often a better deal for buyers putting less than 10% down.
- Piggyback loan (80-10-10): Take a first mortgage for 80%, a second mortgage for 10%, and put 10% down. No PMI because the first mortgage is at 80% LTV.
- Lender-paid PMI (LPMI): The lender pays your PMI in exchange for a slightly higher interest rate. Good if you plan to stay in the home long-term.
When Does PMI Go Away?
On conventional loans, PMI automatically cancels when your loan balance reaches 78% of the original purchase price, or you can request cancellation at 80%. For FHA loans originated after June 3, 2013, mortgage insurance lasts the life of the loan — the only way to remove it is to refinance into a conventional loan.
In Utah's appreciating market, many homeowners reach 80% LTV faster than expected due to rising home values. You can request a new appraisal to prove your home's current value and have PMI removed early.
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