Helpful Toolbox

PMI Calculator

See what private mortgage insurance really costs each month — and exactly when you can stop paying it.

📖 How it works & FAQ

What PMI is and why you pay it

Private mortgage insurance (PMI) is a fee most conventional lenders charge when your down payment is under 20% — that is, when your loan-to-value ratio (LTV) is above 80%. It protects the lender, not you, and typically runs 0.3%–1.5% of the loan balance per year depending on your credit score, down payment, and loan type. This calculator uses the simple industry formula: loan amount × annual PMI rate ÷ 12 = your monthly PMI payment.

When PMI drops off

The good news: PMI is temporary. Under the Homeowners Protection Act, you can request cancellation once your loan balance falls to 80% of the home's original value, and your lender must cancel it automatically at 78% (if you're current on payments). This tool amortizes your loan month by month using your interest rate and term to estimate when you'll cross each threshold — and roughly how much PMI you'll have paid by then. Paying extra principal or a rise in your home's value can get you there sooner.

How to use it

  1. Enter the home price and your loan amount (price minus down payment).
  2. Set your quoted PMI rate — 0.5% is a typical middle-of-the-road estimate if you don't have a quote yet.
  3. Add your interest rate and loan term so the drop-off timeline can be amortized.
  4. Read the cards: monthly cost, current LTV, and when you hit 80% and 78% LTV.

These figures are estimates only, not financial, insurance, or legal advice — your lender's PMI quote and cancellation terms control.

FAQ

Can I avoid PMI entirely?
Yes — put 20% down, use a piggyback second loan, choose lender-paid PMI (built into a higher rate), or use a VA loan, which has no PMI.
Does PMI go down as I pay off the loan?
With most borrower-paid monthly PMI, the premium is set from your original loan amount and stays flat until it's cancelled, so the estimate here holds until drop-off.
What if my home's value has gone up?
Many lenders will cancel PMI early based on a new appraisal showing 75%–80% LTV at current value, usually after a 2–5 year seasoning period. Ask your servicer.
Is PMI the same as FHA mortgage insurance?
No. FHA loans charge MIP, which has different rates and often lasts the life of the loan. This tool models conventional-loan PMI.