Typically, when you put 5% down on a Conventional Mortgage loan you are paying mortgage insurance that is ordered via the bank and paid in your monthly mortgage payment. Hence why it is called “Monthly Mortgage Insurance”. Because you are purchasing PMI as an individual consumer for a one time loan, the rate Is higher. The banks came out with an ingenious way to make a better alternative for their clients. It’s called LPMI (Lender Paid Mortgage Insurance). (2 comments)