Mortgage Protection vs. PMI: What's the Difference?

The short answerNo. Private mortgage insurance (PMI) protects your lender if you stop making payments, and it's often required with a small down payment. Mortgage protection is life insurance you choose that pays your family if you pass away. You can have PMI and still have no protection for your family.

Side by side

Who it protects: PMI protects the lender; mortgage protection protects your family.
Who gets paid: PMI pays the lender; mortgage protection pays your beneficiaries.
Required? PMI often is with a low down payment; mortgage protection is always optional.
Ends when: PMI can usually be removed once you reach enough equity; mortgage protection lasts for the term you choose.

Why the mix-up happens

Both have 'mortgage' and 'insurance' in the name, and mail offers can look official. Mortgage protection offers come from insurance agencies, not your lender or the government.

Bottom line

If your family would struggle to make the payment without you, PMI won't help them. That's what life insurance is for.

How much would cover your mortgage?

Our free mortgage coverage calculator uses your balance and payment to estimate the coverage to look at.

Use the mortgage calculator

Related free tools

Family needs analysisAdd up debt, income, mortgage and education to get your own coverage number.FAST calculatorSee where money leaks each month and what you could redirect toward protecting your family.See what you may qualify forAnswer a few health questions and see which options are likely to fit.

Common follow-up questions

Can I cancel PMI?

Often, once you reach enough equity, depending on your loan type and lender rules.

Does homeowners insurance cover the mortgage if I die?

No. Homeowners insurance covers the house and belongings, not your life.

Is mortgage protection only for new homeowners?

No. You can apply any time you have a mortgage.

Is the mortgage protection mail from my bank?

Usually not. Those letters typically come from insurance agencies.

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Is mortgage protection the same as PMI?