How this calculator works
Private mortgage insurance is estimated by multiplying the original loan amount by an annual PMI rate and dividing by 12. The payoff estimate amortizes principal and interest until the balance reaches 80% of the original home value.
What affects PMI
Actual premiums depend on loan-to-value ratio, credit profile, loan type, term, occupancy, insurer, and lender. Conventional PMI differs from FHA mortgage insurance premiums and other guarantee fees.
Real-world example
A $400,000 home with 10% down produces a $360,000 loan and 90% starting LTV. At a 0.70% annual PMI assumption, the initial estimate is $210 per month.
Common mistakes
- Assuming PMI protects the borrower rather than the lender.
- Applying conventional cancellation rules to FHA loans.
- Assuming appreciation automatically removes PMI.
- Ignoring servicer requirements for payment history or appraisal.
When to use this calculator
Use it to compare down payments and estimate a temporary housing cost. Confirm the premium and cancellation rules with the lender or servicer.
FAQ
When is PMI usually required?
Conventional lenders commonly require PMI when the starting loan-to-value ratio exceeds 80%.
Does PMI cancel automatically?
Eligible conventional borrower-paid PMI generally has cancellation and automatic termination rules, but loan type and payment status matter.
Is FHA mortgage insurance the same?
No. FHA mortgage insurance uses different premiums and cancellation rules.