π‘οΈ PMI Calculator
What mortgage insurance adds to your payment.
Monthly private mortgage insurance
Estimates for planning only, not financial advice.
Private mortgage insurance protects the lender, not you, and you pay for it when your down payment is under 20 percent. At a 0.75 percent annual rate on a $380,000 loan, PMI costs $237.50 a month, or $2,850 a year. It is pure cost with zero benefit to the borrower, which is why killing it is one of the highest-return moves in homeownership.
How to Use This Calculator
Enter the loan amount and the annual PMI rate from your loan estimate (typically 0.3 to 1.5 percent depending on credit and down payment). Add the home value to check loan-to-value and whether PMI is even required.
Enter loan amount and the PMI rate from your Loan Estimate. Rates vary with credit score and LTV.
Enter home value to compute LTV. Above 80 percent, conventional PMI is required.
Read the monthly cost. To plan its removal, our PMI removal calculator finds the drop-off date.
The PMI Formula
PMI rates are set by private insurers based on risk: lower credit scores and higher LTVs pay more. FHA loans use MIP with different rules, including an upfront premium and, usually, life-of-loan monthly premiums. Conventional PMI is the cancellable kind, which makes it the better target.
Worked Example
Loan $380,000 on a $400,000 home: 95 percent LTV. At 0.75 percent annually, monthly PMI is $380,000 x 0.0075 / 12 = $237.50. Annual cost: $2,850. Over five years that is $14,250 paid for insurance that protects only the lender. Every extra principal payment that pushes LTV toward 80 percent shortens the sentence.
Reading Your Result
PMI typically runs 0.3 to 1.5 percent of the loan per year: $95 to $475 monthly on a $380,000 loan. It falls off automatically at 78 percent LTV of the original value, and you can request cancellation at 80 percent with a good payment history. Appreciation counts: if the home's value rises, a new appraisal can prove 80 percent LTV without paying down much principal.
My rule: treat PMI as a 0.75 percent surcharge on your mortgage rate and attack it like debt. Paying down to 80 percent LTV to kill $237.50 a month is a guaranteed, tax-free return on that principal that no investment reliably beats. Do not wait for the automatic date if appreciation or paydown gets you there sooner; lenders will not remind you. For the full payment picture including PMI, our PITI calculator totals everything.
PMI's economics favor the aggressive: every extra principal dollar that pushes you toward 80 percent loan-to-value earns a return equal to the PMI rate divided by the dollars needed, often 20 percent or more annualized. Few investments beat killing PMI early. Track your home's value too: appreciation can get you to 80 percent without paying an extra dime, but you have to request the cancellation yourself.
Estimates for planning only, not financial advice.
Frequently Asked Questions
What is PMI?
Private mortgage insurance protects the lender against default on conventional loans with less than 20 percent down. The borrower pays the premium, usually monthly, and receives no coverage benefit. It typically costs 0.3 to 1.5 percent of the loan amount per year.
How much does PMI cost per month?
Divide the annual rate by 12 and multiply by the loan amount. At 0.75 percent on $380,000, that is $237.50 a month. Your exact rate depends on credit score, down payment size, and loan type. On a $400,000 loan at 0.5 percent, PMI is $166.67 a month: small rate differences matter.
When can I stop paying PMI?
On conventional loans, you can request cancellation at 80 percent loan-to-value with good payment history, and it drops automatically at 78 percent of the original value. A new appraisal proving appreciation can get you to 80 percent faster. The Homeowners Protection Act sets the federal floor: servicers cannot refuse a valid 80 percent request.
Is PMI tax deductible?
PMI deductibility has come and gone with Congress several times and phases out at higher incomes when available. Check current tax law for the year you file; do not assume it in your cost math. The 2021-2025 deduction rounds had income phaseouts starting at $100,000: check your year's rules.
What is the difference between PMI and MIP?
PMI is private insurance on conventional loans and can be cancelled. MIP is FHA mortgage insurance with an upfront premium plus monthly payments that usually last the life of the loan. Conventional PMI is far easier to escape. FHA's upfront MIP is 1.75 percent of the loan, usually financed into the balance.
Can I avoid PMI with less than 20 percent down?
Options include lender-paid PMI (built into a higher rate), piggyback second mortgages, and some first-time buyer programs. Each has trade-offs; compare the all-in monthly cost rather than just the PMI line. Piggyback 80-10-10 loans dodge PMI but add a second payment: compare blended rates carefully.
Does PMI protect me if I default?
No. It protects the lender's losses after foreclosure. Borrowers sometimes assume the insurance covers them; it does not. Your protection is equity, emergency savings, and insurance you buy for yourself. What protects you is homeowners insurance and an emergency fund, not PMI.
How do I request PMI cancellation?
Contact your servicer at 80 percent LTV based on current value, with on-time payments and often a new appraisal at your cost. Requirements vary by servicer and investor (Fannie Mae, Freddie Mac), so ask for their specific checklist. Get the request in writing and keep records: verbal promises vanish when servicers transfer loans.
Does making extra payments remove PMI faster?
Yes. Extra principal directly lowers LTV toward the 80 percent threshold. On a $380,000 loan, the dollars that kill $237.50 a month of PMI earn an excellent effective return. Killing PMI early is often a better return than investing the same dollars: run both numbers.
Why is my PMI rate higher than my friend's?
PMI pricing is risk-based: lower credit scores, smaller down payments, and riskier property types pay more. Improving your score before applying is one of the cheapest ways to cut the premium. Rate quotes assume a 760 score: below 700, PMI can double versus the advertised best case.