Due to this added risk, your lower down payment will mean that your regular mortgage payments will be higher, and it will take more time before you can cancel your PMI. The larger mortgage payment will also make it more difficult to make your mortgage payments, which means you might be charged higher PMI premiums. You can reduce the amount of PMI you have to pay by increasing your down payment, even if it is less than 20%. 

2: Credit history 

To ensure you have been a responsible borrower in the past, your lender will investigate your credit history. Your credit history is used as an indicator of how reliably (or unreliably) you have repaid borrowed money. For instance, a higher credit score can indicate a few different things, such as: 

  • You promptly pay your bills 
  • You avoid maxing out your credit limit 
  • You borrow only as much money as you can repay 
  • You consistently make more than the minimum payments on accounts, credit cards, etc.  

Since you have proven that you are a responsible borrower who consistently pays back the money you borrow, lenders may charge you less PMI premiums if you have a good credit history and high credit score. If you have a lower credit score, on the other hand, the lender will likely trust you less in your ability to responsibly manage your debt. This may result in your having to pay a higher PMI premium.  

3: Type of loan 

The amount you have to pay in PMI can also be influenced by your loan type. A fixed-rate loan, for instance, can reduce the amount of risk involved with the loan since the rate will remain constant, which also means consistent mortgage payments for you. If you are seen as less of a risk, your PMI will be lower and, ultimately, you will likely pay less.