If you’re buying a home with a conventional mortgage and putting less than 20% down, you may have to pay private mortgage insurance (PMI). So, how much is PMI?
On a $300,000 mortgage, average PMI costs typically range from $115 to $375 per month depending on your credit score and down payment (0.46% to 1.50% annually).
There is no single PMI price that applies to every borrower. Your PMI cost can depend on factors such as your loan amount, down payment, loan-to-value ratio (LTV), credit profile, and the terms offered by your lender and mortgage insurer.
The easiest way to estimate your personal cost is to use a free PMI calculator with your own home price, down payment, loan amount, and estimated PMI rate.
What Is PMI?
Private mortgage insurance, commonly called PMI, is insurance that protects the lender, not the borrower, if a borrower stops making mortgage payments.
PMI is generally associated with conventional mortgages where the borrower has less than 20% equity in the home. It allows some borrowers to purchase a home without saving a 20% down payment, but it adds another cost to the mortgage.
PMI should not be confused with homeowners insurance. Homeowners insurance protects against covered losses involving the property, while PMI protects the lender against the risk associated with a lower-down-payment mortgage.
How Much Does PMI Cost?
Your PMI cost is not determined by the home price alone.
Two borrowers buying homes at the same price can have different PMI costs because their down payments, loan amounts, credit profiles, and mortgage terms may differ.
Some of the factors that can affect PMI include:
- Down payment amount
- Loan-to-value ratio (LTV)
- Loan amount
- Borrower credit profile
- Mortgage and PMI program
- Lender and mortgage insurer requirements
Because PMI pricing varies, an online estimate should be treated as an estimate rather than a guaranteed quote.
How Is Monthly PMI Calculated?
If your PMI rate is expressed as an annual percentage, a simple estimate is:
Monthly PMI = Loan amount × Annual PMI rate ÷ 12
For example, suppose you have:
- Loan amount: $270,000
- Hypothetical annual PMI rate: 0.50%
The calculation would be:
$270,000 × 0.005 ÷ 12 = $112.50 per month
This is a hypothetical example, not a statement of the current market PMI rate.
Your actual PMI payment can be different depending on your mortgage and PMI terms.
How Does Your Down Payment Affect PMI?
Your down payment is one of the most important factors in determining how much you borrow and how much equity you initially have in the property.
For example, consider a hypothetical $300,000 home:
| Down payment | Down payment amount | Mortgage before other costs |
|---|---|---|
| 5% | $15,000 | $285,000 |
| 10% | $30,000 | $270,000 |
| 15% | $45,000 | $255,000 |
| 20% | $60,000 | $240,000 |
A larger down payment generally means a smaller mortgage balance and lower LTV.
With a conventional mortgage, reaching 20% equity can also be important because PMI cancellation rules may apply once the mortgage reaches the applicable threshold.
However, don’t assume that every mortgage automatically eliminates mortgage insurance at exactly 20% down. Loan type and mortgage terms matter.
How Does Credit Affect PMI Cost?
Credit history can also affect the cost of private mortgage insurance.
The CFPB notes that PMI rates can vary based on factors including down payment and credit score.
This means two borrowers with the same home price and down payment could potentially receive different PMI pricing.
For that reason, a generic PMI percentage found online should not be treated as a personalized quote.
The most accurate estimate for your situation will come from your lender or mortgage insurer.
How Much Is PMI Per Month?
The monthly cost depends primarily on the loan amount and the PMI rate used for the estimate.
For example, using the same hypothetical 0.50% annual PMI rate:
$200,000 loan
$200,000 × 0.005 ÷ 12 = $83.33/month
$270,000 loan
$270,000 × 0.005 ÷ 12 = $112.50/month
$350,000 loan
$350,000 × 0.005 ÷ 12 = $145.83/month
These examples use the same hypothetical PMI rate simply to demonstrate the calculation. They are not estimates of current PMI pricing.
Your actual PMI rate may be different.
How Much Is PMI on a $300,000 Mortgage?
The answer depends on the PMI rate used for the mortgage.
For example, if a $300,000 mortgage had a hypothetical annual PMI rate of 0.50%:
$300,000 × 0.005 ÷ 12 = $125 per month
Again, this is only a mathematical example.
A $300,000 mortgage does not automatically have a $125 PMI payment. The actual cost depends on the borrower’s mortgage and PMI terms.
You can use our PMI calculator to test different loan amounts and PMI rates.
How Much Is PMI on a $400,000 Mortgage?
Using the same hypothetical 0.50% annual PMI rate:
$400,000 × 0.005 ÷ 12 = $166.67 per month
This illustrates why the loan balance matters. If the PMI rate stays the same, a larger loan produces a larger estimated monthly PMI payment.
However, actual PMI pricing isn’t necessarily a simple fixed percentage for every borrower.
When Can PMI Be Removed?
For many conventional mortgages covered by the federal Homeowners Protection Act, borrowers have the right to request PMI cancellation when the mortgage principal is scheduled to reach 80% of the home’s original value, provided the applicable requirements are met. Those requirements can include being current on payments, having a good payment history, having no qualifying junior liens, and meeting the servicer’s requirements regarding the property’s value.
For many covered mortgages, PMI is generally required to terminate automatically when the principal balance is first scheduled to reach 78% of the original value, provided the borrower is current on the mortgage.
There can also be other cancellation provisions depending on the mortgage and investor guidelines.
What Is the Difference Between 80% and 78%?
The distinction is important:
80%: In many covered conventional mortgages, this is the point at which the borrower can request PMI cancellation if the applicable requirements are satisfied.
78%: For many covered mortgages, PMI generally must automatically terminate when the scheduled principal balance reaches 78% of the home’s original value, assuming the borrower is current.
These rules generally relate to conventional PMI covered by the Homeowners Protection Act. FHA and VA mortgage insurance have different rules, so don’t apply conventional PMI cancellation rules to those loans automatically.
How to Calculate Your PMI
You can estimate your monthly PMI in a few steps:
- Determine your home price.
- Determine your down payment.
- Calculate the mortgage amount.
- Enter the estimated annual PMI rate.
- Divide the annual PMI amount by 12 to estimate the monthly cost.
For example:
Home price: $300,000
Down payment: 10%
Down payment: $30,000
Loan amount: $270,000
Hypothetical PMI rate: 0.50%
Estimated annual PMI:
$270,000 × 0.005 = $1,350
Estimated monthly PMI:
$1,350 ÷ 12 = $112.50
This example is hypothetical and does not represent a current PMI quote.
Try the UCT PMI Calculator
Instead of calculating everything manually, you can enter your own numbers into our free PMI calculator.
You can use it to estimate monthly PMI based on your loan amount and PMI rate and explore how changing your down payment or other inputs affects the calculation.
Can a Larger Down Payment Reduce PMI?
A larger down payment can reduce your mortgage balance and initial LTV.
For example, a 10% down payment creates a smaller initial loan than a 5% down payment on the same home.
A larger down payment can therefore affect PMI requirements and pricing, although the exact result depends on the mortgage and PMI program.
A 20% down payment may also eliminate the need for borrower-paid PMI on many conventional mortgages, but borrowers should confirm the specific requirements with their lender.
Is PMI the Same as FHA Mortgage Insurance?
No.
PMI generally refers to private mortgage insurance associated with conventional mortgages.
FHA mortgage insurance is different and follows FHA-specific rules.
This distinction matters when researching questions such as how to remove mortgage insurance. A rule that applies to conventional PMI should not automatically be applied to FHA mortgage insurance.
If you have an FHA loan, check your loan documents and contact your mortgage servicer for the rules that apply to your loan.
PMI Cost: Key Takeaways
The answer to “how much is PMI?” depends on your individual mortgage.
The most important points are:
- PMI is generally associated with conventional mortgages with less than 20% down.
- PMI protects the lender rather than the borrower.
- PMI cost can vary based on factors such as LTV, down payment, loan amount, and credit profile.
- Monthly PMI can be estimated by multiplying the loan amount by an annual PMI rate and dividing by 12.
- Online PMI examples are estimates, not guaranteed mortgage quotes.
- For many covered conventional mortgages, borrowers can request PMI cancellation around the 80% original-value threshold when applicable requirements are satisfied.
- For many covered mortgages, PMI generally automatically terminates at the scheduled 78% threshold when the borrower is current.
- FHA and VA mortgage-insurance rules are different from conventional PMI rules.
Frequently Asked Questions
There is no single monthly PMI amount for everyone. It depends on factors such as the loan amount, PMI rate, down payment, LTV, credit profile, and mortgage terms. A simple estimate is loan amount × annual PMI rate ÷ 12.
It depends on the PMI rate. For example, at a hypothetical 0.50% annual rate, $300,000 × 0.005 ÷ 12 equals $125 per month. This is an illustrative calculation, not a current PMI quote.
Using a hypothetical 0.50% annual PMI rate, a $400,000 loan would produce an estimated PMI payment of $166.67 per month. Your actual PMI cost may be different.
Depending on the mortgage program, borrowers may be able to avoid PMI through a larger down payment or other loan structures. The trade-offs can vary, so compare the total cost of the available mortgage options rather than looking at PMI alone.
For many conventional mortgages covered by the Homeowners Protection Act, borrowers can request cancellation when the principal is scheduled to reach 80% of the home’s original value, subject to applicable requirements. Automatic termination generally occurs at the scheduled 78% point when the borrower is current.
A higher down payment reduces the initial loan-to-value ratio and may affect whether PMI is required and how much it costs. The exact result depends on the mortgage and PMI program.
Credit profile can be one factor used in PMI pricing. The CFPB notes that PMI rates can vary based on down payment and credit score.
No. PMI protects the lender against certain losses associated with borrower default, while homeowners insurance protects against covered property losses and damage. They are separate costs and serve different purposes.
Important Note
The PMI calculations on this page are educational estimates. Actual PMI pricing and eligibility depend on the mortgage, lender, mortgage insurer, borrower qualifications, and loan terms. This article is not financial, mortgage, legal, or tax advice. For a personalized mortgage decision, review your loan terms with your lender or a qualified professional.