PMI Calculator
Private mortgage insurance (PMI) is required on conventional loans when your down payment is below 20%. It costs 0.5%–1.5% of your loan amount per year and can be cancelled once your balance drops to 80% of the original purchase price.
Enter your home price, down payment, PMI rate, and loan details to see your monthly PMI cost, exactly when it drops off, and the total you'll pay before cancellation.
| Year | Balance | LTV | Monthly PMI | PMI Status |
|---|
How PMI Works — and How to Get Rid of It
Private mortgage insurance exists because lenders see loans with less than 20% down as riskier. If a borrower defaults with only 10% equity, the lender may not recoup the full loan balance after selling the property. PMI transfers that risk to an insurance company — but the borrower pays the premium. The good news: unlike FHA mortgage insurance, conventional PMI is temporary.
Your PMI rate depends on your credit score, down payment, and loan type. A borrower with a 760+ credit score putting 10% down might pay 0.5%. A 680 score with 5% down might pay 1.2%–1.5%. On a $350,000 home with a $315,000 loan, the difference between a 0.5% and 1.2% PMI rate is $220/month — over $2,600/year.
The 80% LTV Rule: How Cancellation Works
Under the federal Homeowners Protection Act (HPA), PMI must automatically terminate when your loan balance reaches 78% of the original purchase price based on your scheduled payment history. But you can request cancellation at 80% — saving several months of premiums. The 80% threshold is calculated against the original purchase price, not the current appraised value (unless you get a new appraisal after significant appreciation).
On a $350,000 home with 10% down ($315,000 loan), 80% LTV is $280,000 — meaning you need to pay down $35,000 in principal. On a 30-year mortgage at 6.5%, that takes approximately 9–10 years. That's several years of PMI payments — which is why increasing your down payment to 20% at purchase is often worth it when possible.
How to Eliminate PMI Faster
Three proven strategies reduce your PMI timeline:
- Make extra principal payments: Even $100–200/month extra accelerates paydown, moving up the 80% LTV date by months or years.
- Request a new appraisal after appreciation: If your home has risen significantly in value, you may already be at 80% LTV. FHA loans cannot use this method, but conventional loans can.
- Refinance to a new conventional loan: If rates have dropped and you now have 20%+ equity, refinancing eliminates both the old rate and PMI.
| Down Payment | LTV | Monthly PMI | Years Until PMI Off | Total PMI Paid |
|---|---|---|---|---|
| $17,500 (5%) | 95% | $221 | ~13 yrs | ~$34,500 |
| $35,000 (10%) | 90% | $210 | ~9 yrs | ~$22,700 |
| $52,500 (15%) | 85% | $198 | ~5 yrs | ~$11,900 |
| $70,000 (20%) | 80% | $0 | No PMI | $0 |
PMI vs. FHA Mortgage Insurance — Key Differences
FHA loans come with mortgage insurance premium (MIP), which works differently from PMI. If you put less than 10% down on an FHA loan, MIP stays for the life of the loan — you can only remove it by refinancing into a conventional loan. FHA MIP also has an upfront premium of 1.75% of the loan amount added at closing. For borrowers who qualify, conventional PMI is almost always cheaper over the long run because it's removable.
For a full breakdown of how PMI interacts with your total monthly payment, see What Is PMI and When Does It Go Away? For strategies on reducing your total mortgage cost, read Should You Buy Mortgage Points?
Related Reading
Also see: Mortgage Calculator for your full monthly payment, or Refinance Calculator to see if refinancing out of PMI makes sense.
Frequently Asked Questions
What is PMI and why is it required?
PMI (private mortgage insurance) is required by conventional lenders when your down payment is less than 20% of the home's purchase price — meaning your loan-to-value ratio (LTV) is above 80%. PMI protects the lender (not you) if you default. It typically costs 0.5%–1.5% of the loan amount per year, added to your monthly payment.
When does PMI automatically cancel?
Under the federal Homeowners Protection Act, PMI must automatically cancel when your loan balance reaches 78% of the original purchase price based on your scheduled payments. You can request cancellation earlier when your balance hits 80% LTV. Some lenders also allow cancellation if your home has appreciated and you get a new appraisal showing at least 20% equity.
How much does PMI cost per month?
PMI typically costs 0.5%–1.5% of your loan amount annually. On a $300,000 loan at a 0.8% PMI rate, that's $2,400/year or $200/month. Your exact rate depends on your credit score, down payment, and loan type. Borrowers with higher credit scores and larger down payments pay less.
Can I avoid PMI without a 20% down payment?
Yes — lender-paid PMI trades a higher rate for no monthly PMI charge, a piggyback (80/10/10) loan structure covers part of the gap, VA loans have no PMI for eligible veterans, and a few lenders offer no-PMI conventional programs. Each option has tradeoffs — calculate which costs less over your expected holding period.
Does FHA have PMI?
FHA loans have mortgage insurance premium (MIP) rather than PMI. If you put down less than 10% on an FHA loan, MIP lasts the life of the loan — removable only by refinancing into a conventional loan. Conventional PMI cancels automatically at 78% LTV. For buyers who qualify, conventional loans with PMI are almost always cheaper long-term than FHA MIP.