PMI Calculator

What is PMI and when do you need it?

Private mortgage insurance is a premium you pay to protect the lender against loss if you default. It is not mortgage life insurance, it does not cover your payments if you lose your job, and it never pays you a dollar. It exists because a lender holding 95% of a home's value eats the first-loss position in a foreclosure, so the lender requires a policy, and the borrower writes the check.

You need PMI on a conventional loan whenever your down payment is under 20% — that is, whenever your loan-to-value ratio starts above 80%. On a $400,000 purchase, anything less than $80,000 down puts you in PMI territory. The premium is quoted as an annual percentage of the loan amount, commonly 0.5% to 1.5%, and billed monthly. A borrower with a 760 credit score at 90% LTV might pay 0.30%; the same loan at 640 FICO prices above 1.00%.

The dollar amounts are larger than the percentages suggest. On a $320,000 loan, 0.5% is $133.33 a month and 1.5% is $400.00 a month — a $3,840 annual difference driven mostly by credit score, loan-to-value, and the mortgage insurance company's rate sheet. On the $380,000 loan in the worked example below, a 0.70% premium is $221.67 a month, which is 9.23% of the $2,401.86 principal-and-interest payment.

PMI is temporary by law. The Homeowners Protection Act lets you request cancellation once the balance reaches 80% of the original value, and it forces automatic cancellation at 78% provided you are current on payments. On a $400,000 home that means a $320,000 balance to request and a $312,000 balance to stop paying without asking. FHA mortgage insurance follows different rules and is covered separately in our PMI guide.

How to use this calculator

1. Enter the home's purchase price.
2. Enter your down payment amount or percentage — the loan amount and starting LTV are derived from both.
3. Enter your credit score band. Higher scores qualify for lower rate cards; the calculator maps the band to a typical annual PMI rate.
4. Enter the loan term. PMI rates are quoted annually regardless of term, so a shorter term reduces the months you pay but not the monthly figure.
5. Click Calculate to see the monthly PMI premium, the annual cost, the total paid before cancellation, and the payment number at which you can request removal.

A realistic input set: a $400,000 home with $20,000 down (5%, 95% LTV), a $380,000 loan at 6.5% over 360 months, and a 720 credit score. That combination typically prices near 0.70% annually, so the calculator should show 0.007 × 380,000 ÷ 12 = $221.67 a month, $2,660 a year, and cancellation at payment 124 when the balance first falls to $320,000 — 10 years and 4 months after closing. If your score is 760, expect the rate to fall to roughly 0.30%–0.45% ($114–$143 a month); at 660, expect 1.00%–1.25% ($317–$396 a month).

How PMI is calculated

Mortgage insurers publish a rate card with two inputs — credit score and loan-to-value ratio — plus adjustments for occupancy, documentation type, and the number of borrowers. Your rate is an annual percentage. The insurer applies it to the original loan amount for the first year, then to the declining balance, and the servicer divides by twelve to bill you.

Monthly PMI = (annual PMI rate × loan balance) ÷ 12

Here the annual PMI rate is the percentage your rate card produced (0.50% to 1.50% on conventional loans), and the loan balance is the original loan amount at the start and the amortized balance thereafter. LTV — the second input on every rate card — is loan ÷ value: $380,000 ÷ $400,000 = 95%.

Worked example: $400,000 home, 5% down, 720 credit score

Step 1: down payment is 400,000 × 0.05 = $20,000, so the loan is $380,000 and the starting LTV is 380,000 ÷ 400,000 = 95%. Step 2: a 720 score at 95% LTV prices near 0.70%. Step 3: 0.0070 × 380,000 = $2,660.00 of premium per year. Step 4: 2,660.00 ÷ 12 = $221.67 a month, added to the $2,401.86 principal-and-interest payment for a total of $2,623.53.

Step 5: find the removal point. Cancellation is available at 80% of the original value, which is 400,000 × 0.80 = $320,000. Repaying $60,000 of principal at 6.5% reaches that balance at payment 124, so at 0.70% you would pay PMI for 124 months. Step 6: total premium. Each year the balance drops, so the actual figure is $25,559 over those 124 months rather than 124 ÷ 12 × 2,660 = $27,487. Step 7: automatic cancellation runs at 78% of original value, or $312,000, reached at payment 135 — eleven months after your own request becomes available.

Worked scenarios

Two inputs move the premium — your credit score and your starting loan-to-value ratio — and one input controls how long you pay it: the balance trajectory. The tables separate the three.

Credit score and premium: $320,000 loan at 90% LTV

The spread from the top row to the bottom is $320 a month, $3,840 a year, and — held for the 124 months in our worked example — roughly $40,000 of mortgage insurance on the identical property. That is the strongest argument for spending six months between closing stages improving a score: moving 675 to 725 changes the rate card by about half a percentage point and costs nothing but time.

Loan size and premium at three rate tiers

Two readings matter here. First, the premium scales with the loan, so a bigger purchase costs proportionally more insurance — the $500,000 row at 1.50% is $562.50 a month. Second, each additional percentage point of rate is worth roughly $119 to $188 a month on these balances, which is why the credit score table above dominates the decision. Note also that every row is above 80% LTV — 85% to 95% — so all four are subject to the cancellation rules in the next table.

When PMI ends: starting LTV versus balance target

Every figure assumes a 30-year loan at 6.5% with no extra principal. The pattern is the useful part: the last five percentage points of down payment buy more time than they buy payment relief. Going from 85% to 95% LTV pushes the removal point from payment 56 to payment 124 — five and a half extra years of premiums. Sending even $200 a month to principal pulls payment 124 forward by 37 months; the mechanics are in the amortization guide.

PMI requirements, thresholds, and alternatives

• 20% down: the threshold that avoids PMI entirely. On a $400,000 home that is $80,000 cash and a $320,000 loan — the premium line becomes $0 on day one.
• Rate range: 0.5% to 1.5% of the loan amount a year. On $320,000 that is $1,600 to $4,800 a year, or $133.33 to $400.00 a month. Borrowers with strong credit and low LTV cluster near the bottom.
• 80% LTV to request cancellation: a $400,000 purchase reaches it at a $320,000 balance — payment 124 on the $380,000 loan above. You must request it in writing; the servicer will not volunteer.
• 78% LTV for automatic cancellation: $312,000 on a $400,000 purchase, reached at payment 135, and it happens without you asking as long as the loan is current.
• Two-year seasoning: conventional servicers may not cancel before two years of payments have been made, and not before the amortization schedule shows you reaching 80% through scheduled payments alone.
• Value-based cancellation: after two years of scheduled payments you may ask the servicer to use a current appraisal instead of the original value. On a $400,000 purchase with a $336,000 balance you need a $420,000 valuation to prove 80% — a 5% market gain and a $600 appraisal.
• FHA alternative: 1.75% upfront MIP plus 0.55% annually with more than 5% down, or 0.85% with 5% or less, on a 30-year loan. Premium lasts the whole term when you start below 10% down — which is why conventional PMI is usually the cheaper long-run choice.
• VA and USDA: no PMI at all. VA charges a one-time funding fee of 2.15% with no money down; USDA charges 1% upfront plus a small annual guarantee fee.
• Lender-paid PMI: priced as a rate increase of roughly 0.375% to 1% instead of a monthly premium. On a $380,000 loan a half-point costs about $126.29 a month versus $221.67 borrower-paid — cheaper monthly, permanent, and non-cancellable.

PMI tips for 2026

1. Check your actual rate card before you accept the payment. Ask the loan officer for the PMI rate at 95%, 90%, and 85% LTV with your credit score. The difference between 0.70% and 0.50% on a $380,000 loan is $55.42 a month — small enough to be worth one phone call, large enough to matter over 124 months.
2. Time the cancellation request yourself. The 80% request is yours to make, in writing, with payment history and a current statement attached. Borrowers who never ask pay until the 78% automatic date — an average of eleven months longer on the $380,000 example, worth about $2,028 at 0.70%.
3. Use an appraisal when your market has moved. After two years of payments, a current valuation can establish 80% even if scheduled amortization has not reached it yet. A $336,000 balance against a $420,000 appraisal is exactly 80% — a 5% gain on a $400,000 purchase, and the appraisal that proves it costs about $600.
4. Send principal, not extra escrow payments. Extra payments reduce the balance, which is what the cancellation test measures. $200 a month extra on the $380,000 loan moves the $320,000 target forward from payment 124 to payment 87 — 37 months earlier — cutting $7,153 of premium at 0.70%.
5. Weigh a piggyback structure at origination. The 80/10/10 structure — $40,000 down, a $320,000 first at 6.5%, and a $40,000 second at 9% interest-only — totals $2,322.62 against $2,623.53 for 5% down with PMI. It saves $300.91 a month and sidesteps PMI, at the cost of a second payment that never amortizes.
6. Do not refinance solely to remove PMI. Refinancing costs 3% to 6% of the loan — $9,600 to $19,200 on $320,000. If you are within twelve months of the 80% date, waiting is cheaper than paying closing costs to reset the loan; if rates are 0.75% lower, the refinance calculator decides it with real numbers.
7. Compare FHA against conventional before you commit. FHA's 0.55% annual premium is lower than a 0.70% PMI rate, but it lasts for the life of the loan below 10% down and adds 1.75% upfront. On a $386,000 FHA loan the upfront charge is $6,755 financed; over eight years of conventional PMI the cumulative cost is $20,189 at 0.70%. Run both in the FHA loan calculator.

Common mistakes with PMI

• Waiting for the servicer to cancel it. Automatic cancellation only applies at 78% of original value, which on our example is payment 135. The 80% request at payment 124 is one you initiate — not writing in costs eleven months and about $2,028 at a 0.70% premium.
• Confusing PMI with mortgage life or disability insurance. PMI protects the lender against your default. It pays nothing to your family and covers nothing if you are disabled. If you need income protection, that is a separate policy bought separately.
• Judging the premium as a percentage instead of dollars. "0.7% is small" is how people underreact. On a $450,000 loan at 1.00% the bill is $375 a month, $4,500 a year — enough to move your debt-to-income ratio by 3 to 4 percentage points on a $12,000 income.
• Assuming the premium never changes. Borrower-paid PMI is fixed for the life of the policy and recalculates as the balance falls. Lender-paid PMI and FHA's annual MIP follow different schedules. Read which one you have on the Loan Estimate before comparing quotes.
• Paying off PMI with cash instead of an appraisal. To drop from a $336,000 balance to $320,000 needs $16,000 of principal. If a $600 appraisal already values the home at $420,000, the appraisal delivers the same result for 3.75% of the cash. Check both routes before writing a check.
• Ignoring PMI when sizing the purchase. A $221.67 premium is 9.23% of the principal-and-interest payment and it qualifies against your housing ratio. Adding it pushes a $2,401.86 payment to $2,623.53 before taxes and insurance, which is 22.8% of a $11,500 gross monthly income rather than 20.9%.

Frequently asked questions

How much is PMI on a $320,000 loan? Between $133.33 and $400.00 a month, because PMI runs 0.5% to 1.5% of the loan amount annually. A 760 credit score at 90% LTV prices near 0.30% ($80 a month); a 660 score prices near 1.00% ($266.67). Credit score and starting loan-to-value are the two inputs every rate card uses.

When can I cancel PMI? When the balance reaches 80% of the original purchase price or appraised value, you may request cancellation in writing. Your servicer must cancel automatically at 78% if payments are current. On a $400,000 home that is a $320,000 balance to request and $312,000 to stop paying without asking.

How do I get rid of PMI faster? Three routes: amortize to 80% with extra principal, prove value with a new appraisal once you pass two years and 75% LTV, or structure the loan to avoid PMI from the start with an 80/10/10 piggyback. A refinance works too but costs 3% to 6% of the balance.

Does PMI ever go away on its own? Yes. Under the Homeowners Protection Act, a servicer must cancel borrower-paid PMI on the payment date when the balance hits 78% of the original value, provided you are current. On the $380,000 loan above that is payment 135. It never happens early — only on schedule or on your request.

What is the difference between PMI and FHA mortgage insurance? PMI is on conventional loans, is cancellable, and has no upfront charge. FHA charges 1.75% upfront MIP — $6,755 on a $386,000 loan — plus 0.55% to 0.85% annually, and the annual premium lasts the entire loan when you start below 10% down. VA and USDA have neither.

How much does my credit score change the PMI rate? A lot. On a $320,000 loan, 760+ scores price near 0.30% ($80 a month) and scores under 640 near 1.50% ($400 a month) — a $320 monthly spread and $3,840 a year on the same house. Lenders price this into the rate sheet, so improving the score before applying pays twice.

Is lender-paid PMI a good deal? Sometimes. The lender adds roughly 0.375% to 1% to your rate instead of charging a premium — on a $380,000 loan a half-point is about $126.29 a month against $221.67 borrower-paid at 0.70%. It is cheaper monthly, but it never cancels, so it wins only if you sell or refinance within a few years.

Is PMI tax deductible? Deductibility has changed from year to year and depends on your income. Treat it as non-deductible when budgeting, then confirm the current tax year's rules with a qualified tax professional before claiming the premium on your return.

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