PMI calculator

How this calculator works

This calculator estimates monthly private mortgage insurance (PMI) and a rough timeline for when scheduled principal-and-interest payments may bring the loan balance to 80% of the original home value—the threshold where conventional borrower-paid PMI is often eligible for cancellation.

Monthly PMI is estimated by multiplying the original loan amount by an annual PMI rate and dividing by 12. The payoff projection amortizes the loan at your entered interest rate and payment schedule until the remaining balance reaches 80% of the purchase price or appraised value you enter.

This is a simplified model. Actual PMI premiums depend on credit score, loan type, insurer, and lender guidelines. Cancellation may require a request, payment history, or a new appraisal. FHA loans use mortgage insurance premium (MIP) with different rules. Use this estimate for planning, then confirm premium and cancellation terms with your lender or servicer.

What affects the result

PMI cost and duration depend on more than the down payment percentage alone.

• Down payment and starting LTV — Conventional loans with less than 20% down typically start above 80% loan-to-value (LTV), triggering PMI. A 10% down payment on a $400,000 home starts at 90% LTV; a 5% down payment starts at 95% LTV with usually higher premiums.
• Annual PMI rate — Lenders and insurers price PMI based on credit profile, loan size, occupancy, and term. Enter the rate from your quote or use a planning assumption such as 0.5% to 1.0% annually on the loan amount.
• Interest rate and term — Higher rates or longer terms slow principal reduction, which can extend how long PMI remains if cancellation is tied to scheduled amortization reaching 80% LTV.
• Home value assumption — Cancellation at 80% LTV uses original value in many conventional scenarios. Appreciation can reach 80% LTV sooner, but servicers may require an appraisal or automatic termination at 78% LTV of original value on a different schedule.
• Loan type — FHA MIP, VA funding fees, and USDA guarantee fees follow different formulas and cancellation rules than conventional PMI.

Borrower-paid PMI protects the lender, not the borrower, if the loan defaults. It enables homeownership with a smaller down payment at the cost of a temporary monthly premium.

Real-world examples

1. 10% down on a $400,000 home. With $40,000 down, the loan is $360,000 at 90% LTV. At a 0.70% annual PMI rate, monthly PMI is roughly $210. Scheduled amortization may reach 80% LTV ($320,000 balance) in roughly 7–9 years depending on rate and term—not counting extra principal payments.

2. 5% down with higher premium. A $350,000 home with 5% down produces a $332,500 loan at 95% LTV. A 1.0% annual PMI rate adds about $277 per month until cancellation. The higher starting LTV and premium both increase housing cost during the PMI period.

3. Extra payments shorten PMI. A borrower on the $360,000 loan above who adds $200 per month toward principal may reach 80% LTV several years sooner than the scheduled-amortization estimate, reducing total PMI paid. Use the extra mortgage payment calculator to model that effect.

4. FHA vs. conventional. A 3.5% down FHA loan includes upfront and annual MIP with different cancellation rules—often for the life of the loan if down payment is below 10%. Do not apply conventional PMI cancellation assumptions to FHA loans.

Common mistakes

• Assuming PMI protects the borrower rather than the lender. PMI compensates the lender for default risk on low-down-payment conventional loans.
• Applying conventional cancellation rules to FHA loans. FHA MIP has separate premium structures and often longer or permanent coverage periods.
• Assuming appreciation automatically removes PMI. You may need to request cancellation or meet servicer requirements even when market value rises.
• Ignoring servicer requirements for payment history or appraisal. Automatic termination at 78% LTV of original value and borrower-requested cancellation at 80% current value follow different rules.
• Forgetting PMI in affordability math. A $250 monthly PMI charge is real housing cost until it ends. Include it in the home affordability calculator budget.
• Using PMI rate from someone else's credit profile. Premiums vary significantly by credit score and loan characteristics.

When to use this calculator

Use this calculator when comparing down payment options, estimating total housing cost before buying, or planning when PMI may end under scheduled payments.

It is especially useful when deciding between 10% and 20% down, or weighing whether to wait and save a larger down payment versus buying sooner with PMI. Pair results with the home affordability calculator for overall budget, the loan payment calculator for principal and interest, and the extra mortgage payment calculator to see how additional payments affect PMI duration.

Confirm the actual premium quote and cancellation policy with your lender before closing.

Related calculators

Estimate how much home you can afford including PMI using the home affordability calculator. Calculate principal and interest on the mortgage using the loan payment calculator. Model how extra payments shorten PMI duration with the extra mortgage payment calculator.