PMI Calculator
Estimate your monthly private mortgage insurance cost and roughly when you can expect it to drop off.
Free PMI calculator, online and effortless: enter your home price, down payment, estimated PMI rate, and loan term to get an instant estimate of your monthly private mortgage insurance cost — plus your current loan-to-value (LTV), the 80% LTV you must reach to request removal, roughly how many months until PMI can be dropped, and the approximate total you would pay. PMI (Private Mortgage Insurance) protects your lender — not you — and applies to conventional loans whenever your down payment is under 20%, typically costing 0.46% to 1.50% of your loan amount per year. Under the Homeowners Protection Act of 1998, PMI must be automatically canceled once your loan balance reaches 78% of the home’s original value. Use the buttons below to jump to the cost formula, typical PMI rates, or how to get rid of PMI.
What Is PMI?
Private Mortgage Insurance is a policy that protects the lender if a borrower defaults. It’s required on conventional loans when the down payment is less than 20%, because a smaller down payment represents more risk to the lender. Despite the word “insurance,” PMI provides you, the borrower, with zero protection — it exists purely to make low-down-payment lending viable for lenders.
How Much Is PMI? (Formula & Typical Rates)
The fastest way to answer “how much is pmi” is with a simple two-step formula used by this calculator:
Annual PMI = Loan Amount × PMI Rate
Monthly PMI = Annual PMI ÷ 12
For conventional mortgages, PMI generally costs 0.46% to 1.50% of the loan amount per year, according to the Urban Institute’s Housing Finance Policy Center. Your specific PMI rate is driven by your credit score, down payment size, and loan type. A 10% down payment at the mid-range 0.75% on a $342,000 loan works out to about $214 per month — but a stronger credit profile can put you near the low end of the range.
What Is the Average PMI Rate?
Most borrowers pay between 0.5% and 1.0% of the loan amount per year, and the midpoint around 0.75% is a reasonable placeholder. The exact rate depends largely on your credit tier. The table below shows approximate annual rates and what they cost each month on a $350,000 loan.
| Credit Score Tier | Approx. Annual PMI Rate | Monthly Cost on $350,000 Loan |
|---|---|---|
| Excellent (760+) | ~0.46%–0.60% | ~$134–$175 |
| Good (700–759) | ~0.60%–0.85% | ~$175–$248 |
| Fair (660–699) | ~0.85%–1.20% | ~$248–$350 |
| Below 660 | ~1.20%–1.50% | ~$350–$438 |
This is one of the clearest, most direct financial reasons to improve your credit score before applying for a mortgage — the same loan amount can cost more than 3x as much in PMI depending on credit tier alone. Remember that PMI is an annual rate spread across 12 monthly installments, which is why your “monthly PMI” equals the loan amount times the rate divided by 12.
Worked Examples
Example 1: Mid-range PMI rate
A $380,000 loan at a 0.75% annual PMI rate:
$380,000 × 0.0075 = $2,850/year
$2,850 ÷ 12 = $237.50/month
Example 2: The mechanics in detail
One detailed breakdown shows exactly how a lender arrives at your premium: a lender might set an annual PMI premium at 0.51% of the loan amount, so on a $237,500 loan that works out to $1,211.25 a year, or roughly $101 a month. Critically, this amount isn’t static — PMI recalculates against your current loan balance over time, so the monthly cost shrinks gradually as you pay down principal, even before you hit the cancellation threshold.
About the months-to-removal estimate
This calculator estimates how many months it takes to reach the 80% LTV threshold by simulating your principal paydown using the interest rate (APR) you enter. Because it uses a constant PMI rate for the whole period, the total-PMI figure is an approximation — in practice your premium gradually declines as your balance does, so your real total will usually be a little lower.
When PMI Legally Has to Go Away
This is federal law, not lender discretion. The Homeowners Protection Act of 1998 requires lenders to automatically cancel PMI once a borrower reaches a 78% loan-to-value ratio, and borrowers can request cancellation themselves once they hit 80% LTV with a good payment history. The law exists specifically to prevent the practice it was written to stop — homeowners had previously paid hundreds of dollars a year in PMI premiums for the life of their mortgage, even after accumulating 20% equity, once the lender no longer needed the additional protection.
Five ways to get rid of PMI
- Wait for automatic cancellation at 78% LTV — happens without you doing anything.
- Request cancellation once you hit 80% LTV and have a solid payment history.
- Pay down your principal faster with extra payments to reach 80% LTV sooner.
- Get a fresh appraisal — if your home’s value has risen, your current LTV may already be below 80% even without extra payments, and a new appraisal can prove it.
- Refinance once you’re below 80% LTV into a loan that doesn’t require PMI at all.
FHA Loans Use a Different System
PMI applies only to conventional loans. FHA loans use MIP (Mortgage Insurance Premium) instead, which works differently: FHA borrowers pay an upfront mortgage insurance premium of 1.75% of the loan amount, plus an annual premium based on down payment size — and with at least 10% down, that insurance can typically be removed after 11 years, but with less than 10% down, MIP often lasts for the life of the loan. The only way to eliminate MIP before then, in most cases, is to refinance into a conventional loan once you’ve built 20% equity.
Step-by-Step: How to Use This Calculator
- Enter your loan amount (home price minus down payment).
- Enter your estimated PMI rate based on your credit score and down payment size, or use 0.75% as a reasonable mid-range placeholder.
- Review your estimated monthly PMI cost.
- Use the Loan-to-Value Calculator to track when your balance will cross the 80% and 78% thresholds.
- Revisit this calculator annually as your loan balance drops — your PMI payment decreases over time even before it’s canceled entirely.
The 20% Down Debate: Is Avoiding PMI Worth It?
A common financing question is whether to avoid PMI entirely with a 20% down payment or accept it with a smaller down payment. In practice the decision comes down to comparing your specific PMI rate against what you could earn investing the money you’d otherwise put down. It’s also worth remembering that many homeowners mistakenly believe their lender will automatically drop PMI once their home’s value rises enough — but this almost never happens without the homeowner actively requesting cancellation (at 80% LTV) or waiting for the automatic 78% LTV threshold.
The Three Ways PMI Can Be Structured
Not all PMI works the same way, and the structure your lender offers can significantly change your total cost:
- Borrower-paid monthly PMI (most common): added directly to your monthly mortgage payment, and automatically drops once you hit 78% LTV per federal law. No extra cash needed at closing.
- Lender-paid PMI (LPMI): the lender covers the insurance cost but passes it along through a slightly higher interest rate for the life of the loan. There’s no visible PMI line item, but you can’t cancel it the way you can with borrower-paid coverage — your only real option to remove it is refinancing into a new loan entirely.
- Single-premium PMI: you pay the entire insurance cost as one lump sum at closing instead of monthly. This raises your upfront cash requirement but can lower your monthly payment and total cost if you plan to stay in the home for a long time and won’t refinance soon.
Which structure is right for you?
Borrower-paid monthly PMI is the right default for most buyers, since it’s the most flexible — it disappears automatically as you build equity, with no long-term commitment. Lender-paid PMI can make sense if you want the lowest possible monthly payment and don’t mind the rate stays elevated permanently unless you refinance. Single-premium PMI is worth considering primarily if you have the extra cash at closing and are confident you’ll hold the loan for many years without refinancing, since spreading the cost over time (as with monthly PMI) becomes the worse deal the longer you stay.
Frequently Asked Questions
PMI deductibility has changed multiple times in U.S. tax law and depends on your income level and the current tax year — check current IRS guidance or consult a tax professional rather than assuming.
No. PMI protects the lender’s investment, not you. If you’re concerned about your own income disruption, look into mortgage payment protection insurance, which is a separate product.
Yes, in some cases. Some lenders offer “lender-paid PMI” (built into a higher interest rate instead of a separate line item), and some loan products for high-DTI or high-credit borrowers waive PMI even below 20% down.
Yes — a new loan generally requires a fresh PMI determination based on the new loan’s LTV, even if you’d already eliminated PMI on your original loan.
It depends on your loan amount and PMI rate. Multiply your loan amount by the annual rate and divide by 12. For example, 0.75% on a $342,000 loan is about $214 a month. Use the calculator above for your numbers.
PMI is calculated as an annual rate applied to the current loan balance, typically 0.46% to 1.50%, then divided into 12 monthly installments. Your rate is based on your credit score, down payment size, and loan type.
Most borrowers pay between about 0.5% and 1.0% of the loan amount per year. A mid-range rate near 0.75% is a reasonable estimate, with rates lower for excellent credit and higher for weaker credit and smaller down payments.
Under the Homeowners Protection Act of 1998, lenders must automatically cancel PMI once your loan balance reaches 78% of the original value, provided payments are current. You can request removal yourself once you hit 80% LTV.
No. PMI protects the lender against default; homeowners insurance protects the owner’s property. They are separate products with separate purposes, costs, and cancellation rules.
Putting 20% or more down avoids PMI on a conventional loan. Alternatives include lender-paid PMI (a higher rate instead of a line item) and piggyback loans, though each has trade-offs.
Related Calculators
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- Adjustable-Rate Mortgage (ARM) Calculator
- Home Insurance Calculator
- Closing Cost Calculator
- Down Payment Calculator
- House Payment Calculator
- Loan-to-Value (LTV) Calculator
- Debt-to-Income Calculator
- Property Tax Calculator
- Rent vs Buy Calculator
Note: This calculator and article are provided for general educational and informational purposes only and do not constitute financial or lending advice. PMI rates vary by lender, credit score, loan type, and loan-to-value ratio. Always confirm your specific PMI cost and cancellation terms with your mortgage servicer.
References
References cited above are for general orientation only. Please confirm authoritative source URLs (Urban Institute Housing Finance Policy Center, and the U.S. government’s Homeowners Protection Act / Facts for Homeowners materials) with a human reviewer before linking. This page makes no guarantee of figures.
Last updated: 2026-07-30.