Extra charges frequently added to the cost of a mortgage, allowing lenders to increase their yield without showing an increase in the mortgage interest rate is called Private Mortgage Insurance (PMI).

Question

Extra charges frequently added to the cost of a mortgage, allowing lenders to increase their yield without showing an increase in the mortgage interest rate is called Private Mortgage Insurance (PMI).​

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Private Mortgage Insurance (PMI) is an insurance policy that a borrower might be required to buy if they have less than 20% down payment for the home, protecting the lender against loss if the borrower defaults on the loan. Extra charges frequently added to the cost of a mortgage to increase the lender's yield without showing an increase in the mortgage interest rate are typically referred to as points or origination fees, not PMI.

Extra Charges Frequently Added to the Cost of a Mortgage