This type of insurance is required by lenders if the amount borrowed is high when compared to the value of the property. Generally, mortgage insurance is required when this so-called “loan-to-value ratio” exceeds 80%. The purpose of the insurance is to protect the lender against nonpayment of the loan by you, the borrower. If this ratio is reduced over time because of reductions in your principal balance and increases in the value of the property, the lender may no longer be require you to purchase it.