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What is Mortgage Loan Insurance?
Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment starting at 5%* — with interest rates comparable to those offered with a larger down payment. To obtain mortgage loan insurance, lenders pay an insurance premium. Typically, your lender will pass this cost on to you. The premium is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). The premium can be paid in a single lump sum, or it can be added to your mortgage and included in your monthly payments.
| Loan–to-Value | Premium on Total Loan** |
| Standard Purchase Premium | |
| Up to and including 65% | 0.60% |
| Up to and including 75% | 1.70% |
| Up to and including 80% | 2.40% |
| Up to and including 85% | 2.80% |
| Up to and including 90% | 3.10% |
| Up to and including 95% Traditional Down Payment | 4.00% |
