Private mortgage insurance (PMI) is usually required on loans with loan-to-value ratios greater than what percentage?

Private mortgage insurance (PMI) is typically required for loans that have a loan-to-value (LTV) ratio greater than 80%. When a borrower makes a down payment of less than 20% of the property's purchase price, the lender risks a higher potential for default because the borrower has less equity in the home. To mitigate that risk, lenders require PMI. This insurance protects the lender in case the borrower defaults on the loan.

Since the standard threshold for requiring PMI is 80% LTV, this means that if a borrower is financing more than 80% of the home's value, they will generally be required to carry PMI until they have accumulated enough equity to reduce the LTV ratio to 80% or below, typically through payments or appreciation of the property's value.