PMI calculator Estimate your monthly private mortgage insurance cost, see when PMI drops off, and compare your total monthly payment with and without PMI.
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Enter values Provide home value, down payment percentage, loan rate, and PMI rate to estimate your monthly costs.
PMI calculator: estimate your monthly private mortgage insurance cost and when it drops
Enter your home value, down payment, loan rate, and PMI rate to see how much private mortgage insurance adds to your monthly payment and how long you will pay it before reaching 80% loan-to-value.
What is PMI and why it is required
Private mortgage insurance (PMI) is required by lenders when a borrower puts down less than 20% on a conventional mortgage. It protects the lender — not the borrower — against losses if the borrower defaults on the loan.
PMI is an additional monthly cost on top of your principal and interest payment. Rates typically range from 0.2% to 2% of the loan amount per year, depending on your credit score, down payment, and loan type.
This calculator estimates your monthly PMI cost and projects when PMI will drop off as you pay down the loan balance to 80% of the home's original value.
How PMI cost is calculated
Monthly PMI is calculated as the annual PMI rate multiplied by the loan amount, divided by 12. For example, a 0.5% PMI rate on a $315,000 loan equals $1,575 per year or $131.25 per month.
The loan amount is your home value minus the down payment. If you buy a $350,000 home with 10% down ($35,000), your loan amount is $315,000 and your loan-to-value (LTV) ratio is 90%.
PMI rates vary significantly by credit score and LTV. Borrowers with credit scores above 760 and LTV around 85% may pay as little as 0.2%, while those with scores below 680 and LTV of 95% may pay 1.5% or more.
Monthly PMI = (loan amount × PMI rate) ÷ 12
Where PMI rate is the annual percentage rate (e.g., 0.5%). This gives the monthly premium added to your principal and interest payment.
When PMI drops off
Under the Homeowners Protection Act (HPA) of 1998, lenders must automatically cancel PMI when your loan balance reaches 78% of the original home value. You can also request cancellation when you reach 80% LTV.
This calculator computes how many months of regular payments it takes for your balance to reach 80% of the original home value. It assumes you make the standard monthly payment with no extra payments or home value appreciation.
You may be able to remove PMI earlier by making extra principal payments, refinancing, or requesting a new appraisal if your home has appreciated significantly — though lender rules vary.
How to avoid or reduce PMI
The most straightforward way to avoid PMI is to make a 20% or larger down payment. On a $350,000 home, that means $70,000 down — eliminating PMI entirely.
VA loans (for eligible veterans and service members) and some credit union products do not require PMI regardless of down payment. USDA loans have a different mortgage insurance structure with lower rates.
Lender-paid PMI (LPMI) is an alternative where the lender covers PMI in exchange for a slightly higher interest rate. This can lower your monthly payment but may cost more over the life of the loan since the higher rate is permanent.
PMI vs FHA mortgage insurance (MIP)
FHA loans have their own mortgage insurance called MIP (Mortgage Insurance Premium), which works differently from conventional PMI. FHA MIP includes an upfront premium of 1.75% of the loan amount plus an annual premium of 0.55% for most borrowers.
A key difference: FHA MIP on loans with less than 10% down lasts for the entire life of the loan and cannot be cancelled. Conventional PMI automatically cancels at 78% LTV. This makes conventional loans with PMI potentially cheaper long-term if you plan to keep the mortgage.
This calculator models conventional PMI only. For FHA loan estimates, use an FHA mortgage calculator.
Limitations of this calculator
This calculator uses a fixed PMI rate you provide. In practice, PMI rates are set by the insurer based on your credit score, LTV, debt-to-income ratio, and loan type — factors this tool does not model.
It assumes a 30-year fixed-rate mortgage for the amortization calculation. If you have a 15-year or adjustable-rate mortgage, the PMI drop-off timeline will differ.
The calculator does not account for home appreciation, which could help you reach 80% LTV faster through a reappraisal. It also does not model lender-paid PMI or single-premium PMI options.
Frequently asked questions
What is PMI (private mortgage insurance)?
PMI is insurance that protects the lender if you default on your mortgage. It is required on conventional loans when your down payment is less than 20% of the home's purchase price. It does not protect the borrower.
How much does PMI cost per month?
PMI typically costs 0.2% to 2% of the loan amount per year, paid monthly. On a $300,000 loan at 0.5%, that is $125 per month. Your actual rate depends on your credit score, down payment percentage, and loan type.
When does PMI go away?
PMI automatically cancels when your loan balance reaches 78% of the original home value. You can request cancellation at 80% LTV. This is governed by the Homeowners Protection Act of 1998.
Can I cancel PMI early?
Yes. You can request PMI removal when your LTV reaches 80%, either through regular payments, extra payments, or a reappraisal showing your home has increased in value. Contact your loan servicer to initiate the process.
