From the Blog
PMI in San Antonio: The $113 to $225 a Month Nobody Budgets For
On a $300,000 San Antonio home with 10% down, a $270,000 conventional loan, private mortgage insurance typically costs about 0.46% to 1.5% of the loan amount per year, which works out to roughly $113 to $225 a month for most borrowers. Every lender pricing quote lands somewhere inside that band, and almost every first-time buyer I talk to has never seen the line before their loan estimate. Here is what PMI actually is, when it goes away, and when the FHA comparison changes the answer.
On a $300,000 San Antonio home with 10% down, a $270,000 conventional loan, private mortgage insurance typically costs about 0.46% to 1.5% of the loan amount per year, which works out to roughly $113 to $225 a month for most borrowers. Every lender pricing quote lands somewhere inside that band, and almost every first-time buyer I talk to has never seen the line before their loan estimate. Here is what PMI actually is, when it goes away, and when the FHA comparison changes the answer.
The number to anchor on
The Urban Institute's Housing Finance Policy Center, as summarized by Experian and NerdWallet, puts annual PMI premiums for conventional loans at about 0.46% to 1.5% of the original loan amount. On a $270,000 loan, that range is roughly $1,242 to $4,050 a year, so $103 to $337 a month at the extremes, with the realistic band for good-credit borrowers coming in around $113 to $225 a month. The exact rate depends on credit score, down payment, loan-to-value ratio, and loan type, and at a 0.5% benchmark on that same loan the cost is about $113 a month, roughly $68,000 of a 30-year payment never buys one night of equity.
What PMI is protecting, and why it exists
PMI exists to cover the lender when a borrower's down payment is under 20%, because the loan-to-value ratio is higher and a price dip can put the mortgage underwater before the borrower has meaningful equity. It is not a tax and it is not junk: it is the price of borrowing with less than 20% down, and in most cases it is dramatically cheaper than the decade of renting it takes to save a full 20% down payment at today's San Antonio prices.
When it comes off
On a conventional loan, PMI automatically terminates once your equity reaches 22% of the original home value, and you can request cancellation at 20%. For a buyer who puts 10% down, the clock is driven by the amortization schedule, not the calendar: at current rates, reaching 20% equity on a $300,000 home takes roughly six to eight years if the value simply holds, and faster if values rise or you make extra principal payments. That is the honest reason to make small extra payments when you can; every dollar of principal is a dollar of PMI retired sooner. FHA loans are the exception: the mortgage insurance premium there does not automatically drop, which is why the comparison below matters.
The FHA comparison that changes the answer
FHA requires 3.5% down with an up-front mortgage insurance premium rolled into the loan and an annual premium of 0.55% for most new loans, and on an FHA loan with less than 10% down, the premium stays for the life of the loan. On a $289,500 FHA loan, the FHA case number for a $300,000 purchase at 3.5% down, the annual premium is about $1,592, roughly $133 a month, plus an up-front premium of 1.75%, about $5,066 added to the financed amount. Put that next to the $113 to $225 conventional PMI band, and the honest guidance is this: conventional with 10% down usually beats FHA once you have the 10%, and FHA wins for buyers who truly cannot. The right answer is a spreadsheet question, not a slogan, and it changes with your down payment and credit score.
The honest budget line
Add PMI to the payment math before you fall in love with a price range. On a $300,000 home with 10% down, that is $113 to $225 a month on top of principal, interest, taxes, and insurance, which is the difference between qualifying for one price point and the one below it. Get a lender letter with the actual PMI quote for your scenario, ask what it takes to cancel, and factor the equity timeline into the plan. The loan estimate will show it, but by then you should already know the number.
Written by Phyllis Domingo
REALTOR® · TX License 745926 · 100+ homes sold · Helping families move well in San Antonio and the Hill Country since long before the hard part became normal.
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