PMI calculator

PMI is the cost of borrowing more than 80% of your home's value

Private mortgage insurance (PMI) is what lenders charge when your loan exceeds 80% of the home's value. It protects the lender — not you — from loss if you default. You pay for it, but the benefit goes to the bank. PMI is the price of buying with less than 20% down.

PMI typically runs 0.2%–1.5% of the loan amount per year, depending mostly on your credit score and loan-to-value (LTV) ratio. On a $400,000 loan, that's $67–$500/month. It stops being charged once you reach 78–80% LTV (more on this below), which depending on your loan structure and rate of principal paydown takes 5–12 years.

Exactly how PMI is priced

Lenders get PMI quotes from private insurers (MGIC, Radian, Essent, Arch, National MI). Pricing is tiered by credit score and LTV. A rough matrix of monthly PMI as a % of loan amount:

• 760+ credit, 80.01–85% LTV: 0.19–0.25%
• 760+ credit, 90.01–95% LTV: 0.45–0.55%
• 720 credit, 90.01–95% LTV: 0.65–0.75%
• 680 credit, 90.01–95% LTV: 0.95–1.1%
• <660 credit, 95%+ LTV: 1.3–1.85%

A 40-point credit score difference can double your PMI. If you're close to a boundary (680, 700, 720, 740, 760), pay your card down and wait for the score update before applying — the savings over 5–10 years can run into tens of thousands.

PMI cancellation: the 80% vs. 78% distinction

There are two thresholds in federal law:

• 80% LTV — borrower request. Once your loan balance hits 80% of the original purchase price (or your current appraised value), you can requestPMI removal in writing. The lender is required to remove it if you're current on payments and the home hasn't lost value. You may need to pay for an appraisal to verify value.
• 78% LTV — automatic termination. By federal law (Homeowners Protection Act), PMI must automatically cancel when your loan hits 78% of the original purchase price, regardless of current value. Your lender is required to do this without you asking.

The difference matters because you can reach 80% LTV years before 78% LTV through appreciation — so request removal actively rather than waiting for auto-termination. Also note: some servicers drag their feet on requests. Send your written request certified mail and follow up.

Accelerating PMI removal

Three ways to get rid of PMI faster:

• Pay down principal. Extra principal payments directly reduce LTV. An extra $200/month on a $350,000 loan can knock 3–5 years off your PMI timeline.
• Request a new appraisal. If your home has appreciated since purchase, your current LTV may already be below 80%. Request in writing, pay for an appraisal ($500–$800), submit to your lender.
• Refinance.If rates have dropped and you've built some equity, refinancing into a new loan with LTV ≤ 80% eliminates PMI. Make sure the rate savings justify the closing costs.

PMI vs. piggyback loan (80-10-10)

An alternative to PMI: the 80-10-10 structure. You put 10% down, take a first mortgage for 80% of the price, and take a second mortgage (HELOC or home equity loan) for the remaining 10%. No PMI because your first mortgage is at 80% LTV.

The tradeoff: the second mortgage typically has a higher rate (often 2–4% above the first), it amortizes separately, and it may have a balloon payment. Run the total cost over 10 years and compare. With today's rate environment, PMI is often cheaper than the piggyback.

Lender-paid PMI (LPMI)

LPMI is an alternative where the lender pays the PMI upfront by charging you a higher interest rate — typically 0.25–0.5% higher for the life of the loan. Tradeoff: no separate PMI line item, but the rate increase never goes away, even after you reach 80% LTV.

LPMI makes sense only if you plan to hold the loan for less than ~5 years (sell or refi before equity hits 80%). For long-term holders, borrower-paid PMI with eventual removal is almost always cheaper.

FHA mortgage insurance is different (and worse)

FHA loans have mortgage insurance premium (MIP), not PMI, and the rules are harsher:

• MIP applies for the life of the loan if you put less than 10% down on an FHA loan. You cannot cancel it.
• To stop paying MIP on a post-2013 FHA loan, you typically have to refinance into a conventional loan once you have 20% equity.
• FHA also charges an upfront MIP of 1.75% of the loan at closing.

FHA is still the right call for borrowers with lower credit scores or limited down payments, but plan from day one to refinance into a conventional loan as soon as you hit 80% LTV.

VA and USDA: no PMI

VA loans (active military and veterans) and USDA loans (rural areas, income-limited) have no PMI at all. VA charges an upfront funding fee (typically 2.15–3.3%, waived for disabled veterans). USDA charges a 1% upfront fee plus 0.35% annual guarantee fee that looks like PMI but is typically lower.

When PMI is worth it

PMI isn't evil — it's the mechanism that lets you buy a home with less than 20% down, which for most buyers is the difference between buying now and saving for another 3–5 years. During those 3–5 years, the home might appreciate 15–25%. PMI of $150–$300/month for 6 years is often cheaper than waiting 6 years and paying a higher purchase price.

Run the math both ways using our down payment calculator and compare buying now with PMI vs. waiting to avoid PMI.

Related calculators

Pair this with our mortgage payment calculator to see PMI impact on total PITI, and the home equity calculator to track when you cross the 80% LTV threshold.