Private mortgage insurance in Texas typically costs between 0.30% and 1.50% of your loan amount per year, with your specific rate driven mainly by your credit score and down payment. On a home near the current Texas median sale price of roughly $325,000 with 10% down, that works out to about $75 to $370 added to your monthly mortgage payment. Conventional lenders require PMI whenever your down payment is less than 20% of the purchase price, and the coverage protects the lender if you stop making payments, not you.1Consumer Financial Protection Bureau. What Is Private Mortgage Insurance?
Dollar Examples on a Texas Home
PMI is priced as an annual percentage of your original loan amount, then collected monthly along with your mortgage payment. Here is what the industry range looks like in dollars on a $325,000 Texas home with 10% down (a $292,500 loan):
- Low-end rate of 0.30%: about $878 per year, or roughly $73 per month
- Mid-range rate of 0.75%: about $2,194 per year, or roughly $183 per month
- High-end rate of 1.50%: about $4,388 per year, or roughly $366 per month
With a smaller 5% down payment on the same home (a $308,750 loan), the monthly figures rise slightly, running about $77 to $386 across the same rate range. Your lender will show the exact PMI amount as a line item on the Loan Estimate you receive after applying and again on the Closing Disclosure delivered at least three business days before closing, so you can compare lenders directly before signing.2Consumer Financial Protection Bureau. Closing Disclosure Explainer
What Determines Where You Land in That Range
The gap between the low and high end of PMI pricing is enormous. Four factors push you up or down inside it.
Credit Score
Credit score is the single biggest driver. A borrower with a score of 760 or higher can expect an annual rate around 0.46%. A borrower in the 620–639 range may pay closer to 1.50%, more than triple the cost for the same loan. Pulling your score up before closing, even modestly, can save you real money every month for years.
Loan-to-Value Ratio
Loan-to-value (LTV) measures how much of the home’s price you are borrowing. A 5% down payment creates a 95% LTV; a 10% down payment drops it to 90%. The higher your LTV, the more the lender stands to lose in a default, and the more you pay for PMI.3Fannie Mae. What to Know About Private Mortgage Insurance Putting down 15% instead of 5% can cut your PMI rate roughly in half at the same credit score.
Loan Term
A 30-year mortgage generally carries a higher PMI premium than a 15-year mortgage. With a shorter term the principal drops faster, so the lender’s risk exposure shrinks more quickly. If the higher monthly payment on a 15-year loan fits your budget, the PMI savings stack on top of the interest savings.
Occupancy Type
PMI rates are lowest for primary residences. Second homes and investment properties cost more because default rates on non-primary residences are statistically higher. Most Texas buyers purchasing their main home qualify for the standard tiers.
How You Pay the Premium
Your lender will usually offer four payment structures, and each changes what you feel month to month versus up front.
- Monthly premiums are the most common. Your annual cost is split into twelve installments and added to the mortgage payment. Closing costs stay lower, and the premium ends when you cancel or hit automatic termination.
- A single premium is paid as a lump sum at closing. The monthly charge disappears entirely, but you need more cash to close. Some lenders let you roll the lump sum into the loan balance, which means paying interest on it for years.
- A split premium pairs a smaller lump sum at closing with reduced monthly installments. It fits buyers who have some extra cash but not enough for a full single premium.
- Lender-paid PMI (LPMI) hides the cost in a higher interest rate, typically 0.25% to 0.50% above what you would otherwise get. There is no PMI line on your statement, but LPMI cannot be canceled; the higher rate stays for the life of the loan unless you refinance.
For most Texas buyers, monthly premiums are the best fit because they keep upfront costs low and can be removed once you build enough equity. LPMI can work if you plan to sell or refinance within a few years, but it gets expensive over a long holding period.
How Long You’ll Pay PMI
Monthly PMI is not permanent on a conventional loan. The federal Homeowners Protection Act (12 U.S.C. §§ 4901–4910) gives every Texas borrower with a conforming loan three paths off it.
Request Cancellation at 80% LTV
You can submit a written request to your loan servicer to cancel PMI once your principal balance reaches 80% of the home’s original value, meaning the contract sale price or the appraised value at closing, whichever was lower.4Office of the Law Revision Counsel. 12 USC 4902 – Termination of Private Mortgage Insurance You can reach 80% through scheduled payments or by paying extra principal to get there faster.5Consumer Financial Protection Bureau. When Can I Remove Private Mortgage Insurance (PMI) From My Loan? To qualify you must:
- Be current on your payments with a good history. No payments 30 or more days late in the past 12 months, and no payments 60 or more days late in the 12 months before that.6Office of the Law Revision Counsel. 12 USC 4901 – Definitions
- Certify there are no subordinate liens, such as a second mortgage or home equity loan.
- Provide evidence, often a fresh appraisal, that the home’s value has not dropped below its original value.
A standard single-family appraisal in Texas runs about $300 to $600. Even at the high end, the fee is usually recouped within a few months of eliminated PMI payments.
Automatic Termination at 78% LTV
If you never request cancellation, your servicer must automatically terminate PMI on the date the loan is scheduled to reach 78% of the original value under the original amortization schedule.4Office of the Law Revision Counsel. 12 USC 4902 – Termination of Private Mortgage Insurance You just need to be current when that date arrives. The servicer has 30 days to stop collecting the premium and must notify you in writing.
Because automatic termination follows the original schedule, extra principal payments do not move the automatic date forward. If you have been paying ahead, use the borrower-requested route at 80% to get PMI removed sooner.
Midpoint Backstop
If you still have PMI when your loan reaches the midpoint of its amortization period, year 15 of a 30-year mortgage for example, the servicer must terminate it regardless of your LTV, provided you are current.
Ways to Avoid PMI From the Start
Beyond saving a full 20% down payment, Texas buyers have a few other paths that skip PMI entirely.1Consumer Financial Protection Bureau. What Is Private Mortgage Insurance?
- A piggyback 80-10-10 structure uses a primary mortgage for 80% of the home’s value, a second loan (often a home equity line of credit) for 10%, and 10% down. The first mortgage stays at 80% LTV, so no PMI applies. The second loan carries a higher, often adjustable, rate, so compare the combined cost against conventional financing with PMI before deciding.7Consumer Financial Protection Bureau. What Is a Piggyback Second Mortgage?
- A VA loan requires no down payment and no mortgage insurance for veterans, active-duty service members, and eligible surviving spouses. Texas has several major military installations, so this is a common path for buyers in the state.
- A USDA loan covers eligible rural areas of Texas with no down payment. Instead of PMI, it charges a 1% upfront guarantee fee and a 0.35% annual fee, which is lower than most PMI rates.
One boundary worth noting: FHA loans use a different system called mortgage insurance premiums (MIP), not PMI, and MIP has its own rates and cancellation rules. If you are weighing FHA against conventional, do not assume the PMI figures above apply.
Tax Deduction Returns for 2026
The One Big Beautiful Bill Act, signed into law on July 4, 2025, permanently reinstated the federal income tax deduction for mortgage insurance premiums starting in tax year 2026.8Internal Revenue Service. One, Big, Beautiful Bill Provisions Under the provision, PMI premiums on a qualified home mortgage are treated as deductible mortgage interest on your federal return.9Office of the Law Revision Counsel. 26 USC 163 – Interest The same treatment applies to FHA MIP, VA funding fees, and USDA guarantee fees.
The deduction phases out at higher incomes. Once your adjusted gross income passes $100,000 ($50,000 if married filing separately), the deductible amount is reduced by 10% for each additional $1,000 of income, and it disappears entirely at $110,000 AGI ($55,000 if married filing separately). You can only claim it if you itemize. For a Texas buyer paying several hundred dollars a month in PMI, the deduction can offset a meaningful share of the annual cost.