PMI Calculator
This PMI calculator helps you estimate the monthly cost of private mortgage insurance on your conventional mortgage and, just as importantly, shows you exactly when you can cancel it. PMI is required by lenders whenever your down payment is less than 20% of the home's purchase price, and it protects the lender (not you) if you default on the loan. For most borrowers, PMI costs between 0.3% and 1.5% of the original loan amount per year, adding $100-$400+ to your monthly payment depending on your loan size, credit score, and loan-to-value (LTV) ratio.
The frustrating part about PMI is that it provides zero benefit to you as the borrower, you pay for insurance that protects the bank. The good news is that unlike FHA mortgage insurance (MIP), conventional PMI is not permanent. Under the Homeowners Protection Act (HPA), you can request PMI cancellation once your loan balance reaches 80% of the original home value, and your lender must automatically terminate it at 78%. Use this private mortgage insurance calculator to see your estimated PMI payment, total PMI cost before cancellation, the exact month PMI drops off under normal amortization, and how extra payments can accelerate PMI removal, potentially saving you thousands of dollars.
How to Use the PMI Calculator
Step 1: Enter the Home Purchase Price
Enter the full purchase price of the home. This is the contract price, not the appraised value, though ideally they should match. The original purchase price is what lenders use to calculate PMI cancellation thresholds, even if the home later appreciates in value (with one exception covered in the FAQs). For example, on a $400,000 home, PMI cancellation at 80% LTV means your loan balance must drop to $320,000 ($400,000 x 80%) through regular payments. Most PMI calculators online skip this detail and only show the monthly cost; our calculator shows both the cost and the removal timeline.
Step 2: Enter Your Down Payment
Enter the down payment as a dollar amount or percentage. PMI is only required when the down payment is less than 20%. The most common down payment levels that trigger PMI are 3% (minimum for conventional loans), 5%, 10%, and 15%. Your down payment directly determines two things: the initial PMI rate (higher LTV = higher PMI rate) and how long you'll pay PMI before reaching the 80% cancellation threshold. A 5% down payment on a $400,000 home means you start at 95% LTV and need to pay down $60,000 in principal before reaching 80%, which takes approximately 9-12 years through regular payments alone. A 15% down payment starts at 85% LTV, requiring only $20,000 in principal reduction, typically reached in 3-5 years.
Step 3: Enter Your Interest Rate and Loan Term
Enter your annual mortgage interest rate and select your loan term (typically 30 or 15 years). The interest rate doesn't directly affect the PMI rate, but it significantly impacts how quickly you pay down principal and reach the 80% LTV cancellation threshold. Higher interest rates mean more of each payment goes toward interest rather than principal in the early years, which extends the time until PMI cancels. For a $380,000 loan, reducing the rate from 7.0% to 6.5% moves the PMI cancellation date approximately 4-6 months earlier. A 15-year loan reaches 80% LTV dramatically faster than a 30-year, typically in 3-6 years instead of 8-12.
Step 4: Enter Your Credit Score Range
Select your credit score range. This is the single biggest factor in determining your PMI rate: the difference between excellent and fair credit can double or triple your PMI cost. Here are the approximate annual PMI rate ranges based on credit score and a 90% LTV (10% down) loan:
- 760+: 0.25%-0.45% annually
- 740-759: 0.30%-0.55%
- 720-739: 0.45%-0.70%
- 700-719: 0.55%-0.90%
- 680-699: 0.75%-1.10%
- 660-679: 0.95%-1.30%
- 640-659: 1.10%-1.50%
These rates increase further at higher LTV ratios. A 95% LTV loan (5% down) with a 680 credit score can carry PMI rates exceeding 1.5%: on a $400,000 loan, that is $500/month in insurance alone. If your credit score is below 740, improving it before purchasing can save hundreds per month in PMI.
Step 5: Enter Extra Monthly Payments (Optional)
If you plan to make extra principal payments to reach the 80% LTV threshold faster, enter the additional monthly amount here. Even modest extra payments can accelerate PMI removal significantly. Adding $200/month in extra principal on a $380,000 loan at 6.75% moves the PMI cancellation date from approximately month 108 (Year 9) to month 72 (Year 6), saving you 3 full years of PMI payments. The calculator shows both the standard and accelerated PMI cancellation timelines, along with the total PMI dollars saved by making extra payments. This is one of the highest-return uses of extra cash: every dollar of PMI you avoid paying is a guaranteed saving.
Step 6: Review Your PMI Cost and Removal Timeline
After clicking Calculate, the tool displays your estimated monthly PMI payment, the total PMI cost from loan origination until automatic cancellation, the month and year PMI cancels under normal amortization (at 78% LTV), the earlier date you can request cancellation (at 80% LTV), and the accelerated cancellation date if you entered extra payments. The calculator also shows the monthly payment reduction once PMI drops off, this is the amount your housing payment decreases, which typically ranges from $100 to $400+/month. Review the total PMI cost carefully; on many loans, the cumulative PMI payments before cancellation total $15,000-$40,000.
PMI Cost Examples with Real Numbers
Example 1: 10% Down Payment, Good Credit (Most Common Scenario)
Sarah is buying a $420,000 home in Nashville with 10% down ($42,000). She has a 740 credit score and qualifies for a 30-year fixed at 6.75%.
| Metric | Value |
|---|---|
| Home price | $420,000 |
| Down payment | $42,000 (10%) |
| Loan amount | $378,000 |
| LTV at origination | 90% |
| Credit score | 740 |
| PMI rate | 0.45% annually |
| Monthly PMI | $142 |
| Monthly P&I (without PMI) | $2,452 |
| Total monthly with PMI | $2,594 |
| PMI cancellation (at 78% LTV) | Month 98 (~Year 8, Month 2) |
| Request cancellation (at 80% LTV) | Month 84 (~Year 7) |
| Total PMI paid before cancellation | $11,928 (if cancelled at 80%) - $13,916 (auto at 78%) |
| Payment drop after PMI removal | $142/month savings |
Sarah pays approximately $12,000-$14,000 in total PMI before it cancels. If she requests cancellation at 80% LTV (Year 7) instead of waiting for automatic termination at 78% (Year 8+), she saves about $2,000. Lesson: always request cancellation proactively; don't wait for automatic removal.
Example 2: 5% Down Payment, Fair Credit (High PMI Scenario)
David is buying a $350,000 home in Phoenix with only 5% down ($17,500). His credit score is 680, which pushes his PMI rate significantly higher.
| Metric | Value |
|---|---|
| Loan amount | $332,500 |
| LTV at origination | 95% |
| Credit score | 680 |
| PMI rate | 1.15% annually |
| Monthly PMI | $319 |
| Monthly P&I | $2,156 |
| Total monthly with PMI | $2,475 |
| PMI cancellation (at 78% LTV) | Month 138 (~Year 11, Month 6) |
| Total PMI paid before auto cancellation | $44,022 |
David's combination of low down payment and fair credit creates a PMI cost of $319/month, nearly as much as a car payment. Over 11+ years, he'll pay over $44,000 in PMI alone. This is a scenario where improving credit score before purchasing (680 to 740 would cut PMI roughly in half) or saving for a 10% down payment would produce massive savings.
Example 3: Extra Payments to Accelerate PMI Removal
Lisa has a $300,000 loan at 90% LTV with a 720 credit score and a PMI rate of 0.55%. She decides to add $300/month in extra principal payments specifically to reach 80% LTV faster.
| Metric | Without Extra Payments | With $300/mo Extra |
|---|---|---|
| Monthly PMI | $138 | $138 |
| 80% LTV reached at | Month 90 (Year 7.5) | Month 53 (Year 4.4) |
| Total PMI paid | $12,420 | $7,314 |
| PMI savings from extra payments | - | $5,106 |
| Extra cash invested | - | $15,900 ($300 x 53 months) |
| Net benefit | - | $5,106 saved + faster equity |
Lisa's $300/month extra investment pays off her PMI obligation 37 months early, saving $5,106 in insurance premiums. The extra payments also build equity faster and reduce total mortgage interest. After PMI drops off at month 53, she can redirect the $300 extra plus the $138 PMI savings ($438/month total) toward investments, student loans, or other financial goals.
Example 4: Credit Score Impact on PMI Cost (Same Loan, Different Scores)
This example shows how dramatically credit score affects PMI for the identical loan: $400,000 home, 10% down, $360,000 loan, 30-year fixed at 6.75%.
| Credit Score | PMI Rate | Monthly PMI | Annual PMI Cost | Total PMI Before Cancellation (~8 yrs) |
|---|---|---|---|---|
| 760+ | 0.30% | $90 | $1,080 | $8,640 |
| 740 | 0.45% | $135 | $1,620 | $12,960 |
| 720 | 0.58% | $174 | $2,088 | $16,704 |
| 700 | 0.78% | $234 | $2,808 | $22,464 |
| 680 | 1.05% | $315 | $3,780 | $30,240 |
| 660 | 1.25% | $375 | $4,500 | $36,000 |
The difference between a 760+ score and a 660 score on this loan is $285/month, $3,420/year, $27,360 over the life of PMI. For a buyer at 680, spending 3-6 months improving credit to 740+ before purchasing saves more money than almost any other financial move in the home buying process.
How Is PMI Calculated?
PMI pricing is determined by private mortgage insurance companies (such as MGIC, Radian, Essent, Genworth, and Arch MI) using risk-based pricing tables that consider multiple variables.
Monthly PMI Payment Formula
For a $380,000 loan with a 0.55% annual PMI rate: ($380,000 x 0.0055) / 12 = $174.17/month. Note that PMI is calculated on the original loan amount, not the current balance, so your monthly PMI payment stays the same from origination until cancellation (it does not decrease as you pay down the loan). Some lenders offer declining PMI structures, but the standard is a flat monthly amount.
PMI Rate Factors
The annual PMI rate is determined by the intersection of two primary variables:
Higher LTV (lower down payment) and lower credit scores both increase the rate. Additional factors include: loan type (fixed vs. adjustable, ARMs carry higher PMI rates), occupancy type (primary residence vs. second home), property type (single-family vs. condo vs. multi-unit), and loan amount. These factors are combined in the insurer's rate card, which lenders use to quote your specific PMI cost.
PMI Cancellation Point Formula
Auto-Termination Balance = Original Home Value x 78%
For a $450,000 home: borrower-requested cancellation when balance reaches $360,000 (80% of $450,000), automatic termination at $351,000 (78% of $450,000). The calculator runs the amortization schedule forward, month by month, until the remaining balance hits each threshold, that month is your cancellation date.
Accelerated Cancellation with Extra Payments
Each month, the balance is reduced by: (standard principal portion of payment + extra payment). Extra payments go 100% to principal, accelerating the balance reduction and pulling the 80% LTV threshold closer. The calculator runs this modified amortization to determine the accelerated cancellation month.
Who Uses a PMI Calculator?
First-time buyers deciding between 5%, 10%, or 15% down
Buyers weighing how much to put down, using the calculator to see the exact PMI cost difference between down payment levels and how each option changes the PMI cancellation timeline, so they can decide whether saving for a larger down payment or buying sooner with PMI is the smarter financial move.
Homeowners approaching the 80% LTV threshold
Existing borrowers who want to know exactly when they can request PMI cancellation, using the calculator to determine whether they're close enough to make extra payments and eliminate PMI months or years early, and how much total PMI they'll save by acting now.
Buyers comparing PMI cost vs. piggyback (80/10/10) structure
Borrowers with 10% down evaluating whether paying PMI on a single 90% LTV loan is cheaper or more expensive than an 80/10/10 piggyback mortgage that avoids PMI entirely, using the calculator to compare total costs including PMI duration and cancellation.
Borrowers with mid-range credit scores evaluating the cost of buying now vs. waiting
Buyers with 680-720 credit scores using the calculator to see how much PMI they'd pay at their current score versus what they'd pay after improving to 740+, determining whether delaying the purchase by 3-6 months for credit improvement produces meaningful savings.
Financial advisors modeling total homeownership cost for clients
Planners including PMI in comprehensive housing cost projections to show clients the true monthly and cumulative cost of homeownership beyond just principal and interest, helping them make informed down payment and timing decisions.
Common Mistakes When Calculating PMI
This is the most widespread misconception. Automatic PMI termination happens at 78% LTV, not 80%. At 80% LTV, you have the right to request cancellation, but you must proactively contact your lender in writing, be current on payments, and in some cases pay for a new appraisal to confirm the home's value. If you don't request it, PMI continues until the balance reaches 78%, which can mean 6-12 additional months of payments totaling $1,000-$4,000 in unnecessary insurance. Mark your 80% LTV date on your calendar and submit the cancellation request the month you reach it.
PMI comes in several forms: borrower-paid monthly PMI (the standard, a monthly charge added to your payment), lender-paid PMI (LPMI, the lender pays PMI in exchange for a higher interest rate, and it cannot be cancelled), and single-premium PMI (a lump sum paid at closing, sometimes rolled into the loan). If you have lender-paid PMI, there is no separate PMI charge to cancel, but your higher interest rate lasts the entire loan. If you have single-premium PMI, you have already paid upfront and there is no monthly charge. Check your closing disclosure to identify your PMI type before using the calculator.
Under the Homeowners Protection Act, the 80% and 78% thresholds are calculated against the original property value (the lower of the purchase price or original appraised value), not the current market value. Even if your home has appreciated from $400,000 to $500,000, the standard cancellation calculation uses $400,000 as the baseline, so you need the balance to reach $320,000 (80% of $400K), not $400,000 (80% of $500K). There is an exception: you can request cancellation based on current appraised value if you've had the loan for at least 2 years and the LTV based on a new appraisal is 75% or below (or 80% after 5 years). This exception is valuable in rapidly appreciating markets.
PMI applies to conventional loans and can be cancelled. FHA MIP applies to FHA loans and, for most borrowers who put less than 10% down, lasts for the entire life of the loan and cannot be cancelled regardless of equity. If you have an FHA loan, the PMI calculator's cancellation timeline does not apply to you. The only way to eliminate FHA MIP with less than 10% down is to refinance into a conventional loan once you have sufficient equity (typically 20%+ to avoid triggering PMI on the new loan).
Many buyers focus only on the monthly PMI amount without calculating the total they'll pay before cancellation. A $180/month PMI that lasts 9 years totals $19,440, money that protects the lender, builds no equity, and provides no benefit to you. Sometimes saving for an additional 6-12 months to increase the down payment from 5% to 10% reduces total PMI costs by $15,000-$20,000. The calculator shows the cumulative PMI cost at each down payment level so you can make this comparison explicitly.
PMI Cost Comparison - By Down Payment, Credit Score, and Loan Amount
The table below shows estimated monthly PMI costs and total PMI paid before cancellation for a 30-year fixed mortgage at 6.75%. All cancellation timelines assume regular monthly payments with no extra principal contributions.
| Home Price | Down Payment | Loan Amount | Credit Score | PMI Rate | Monthly PMI | PMI Drops Off | Total PMI Paid |
|---|---|---|---|---|---|---|---|
| $350,000 | 5% ($17,500) | $332,500 | 740+ | 0.50% | $139 | ~Year 10 | $16,680 |
| $350,000 | 5% ($17,500) | $332,500 | 680 | 1.15% | $319 | ~Year 10 | $38,280 |
| $350,000 | 10% ($35,000) | $315,000 | 740+ | 0.35% | $92 | ~Year 7 | $7,728 |
| $350,000 | 15% ($52,500) | $297,500 | 740+ | 0.25% | $62 | ~Year 4 | $2,976 |
| $500,000 | 5% ($25,000) | $475,000 | 740+ | 0.50% | $198 | ~Year 10 | $23,760 |
| $500,000 | 10% ($50,000) | $450,000 | 720 | 0.58% | $218 | ~Year 8 | $20,928 |
| $500,000 | 10% ($50,000) | $450,000 | 760+ | 0.30% | $113 | ~Year 8 | $10,848 |
Key takeaways: moving from 5% to 10% down cuts total PMI cost by more than 50% and removes PMI 2-3 years earlier. Moving from 10% to 15% down nearly eliminates PMI as a meaningful cost (under $3,000 total). Credit score has the most dramatic impact at any given LTV: a 680 score at 5% down pays $38,280 in total PMI versus $16,680 for a 740+ score on the same loan. For buyers with credit scores below 720, improving the score before purchasing is the single highest-ROI action available.
PMI Cost Comparison - By Down Payment, Credit Score, and Loan Amount
| Home Price | Down Payment | Loan Amount | Credit Score | PMI Rate | Monthly PMI | PMI Drops Off | Total PMI Paid |
|---|---|---|---|---|---|---|---|
| $350,000 | 5% ($17,500) | $332,500 | 740+ | 0.50% | $139 | ~Year 10 | $16,680 |
| $350,000 | 5% ($17,500) | $332,500 | 680 | 1.15% | $319 | ~Year 10 | $38,280 |
| $350,000 | 10% ($35,000) | $315,000 | 740+ | 0.35% | $92 | ~Year 7 | $7,728 |
| $350,000 | 15% ($52,500) | $297,500 | 740+ | 0.25% | $62 | ~Year 4 | $2,976 |
| $500,000 | 5% ($25,000) | $475,000 | 740+ | 0.50% | $198 | ~Year 10 | $23,760 |
| $500,000 | 10% ($50,000) | $450,000 | 720 | 0.58% | $218 | ~Year 8 | $20,928 |
| $500,000 | 10% ($50,000) | $450,000 | 760+ | 0.30% | $113 | ~Year 8 | $10,848 |
Frequently Asked Questions
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