Private Mortgage Insurance (PMI) Private mortgage insurance (PMI) allows you to be approved for a loan for as little as 5% down (except for special programs), because the insurance company is willing to share the risk with your lender. For example, if you want an $80,000 home and can only afford $4,000 (5%) down, your PMI would be approximately $50 a month. So and instead of spending years saving up a 20% down payment, PMI helps you become a new home owner faster.