How to use the PMI Calculator
- Enter the home price and your down payment percentage — PMI applies below 20%.
- Set the PMI rate; 0.3%–1.5% of the loan per year is the usual range, driven mainly by credit score and LTV.
- Enter your mortgage rate so the amortisation schedule is accurate.
- Add an appreciation assumption to see when a new appraisal could get PMI removed early.
- Compare the total PMI cost against the extra cash a 20% down payment would require.
How the calculation works
PMI protects the lender, not the borrower, against loss if the loan defaults. It is priced as an annual percentage of the loan balance and billed monthly. The rate depends on the loan-to-value ratio and credit score, and the spread is large: a 760 score at 90% LTV might pay 0.3%, while a 640 score at 97% LTV can pay well over 1%, which on the same loan is a difference of hundreds of dollars a month.
Two removal paths exist and they are governed by different rules. Under the Homeowners Protection Act, the servicer must cancel PMI automatically when the scheduled balance reaches 78% of the original value, and must honour a borrower request at 80% of original value if payments are current. Separately, most servicers will consider a request based on a new appraisal showing 80% LTV against current value — that is the path appreciation opens, and it is the only one that can arrive years early.
The right comparison is not PMI versus no PMI, but PMI versus the cost of waiting. Saving another 10% of the price can take years, during which prices may rise faster than savings accumulate. Paying two or three years of PMI to buy sooner is often the cheaper outcome; buying at the top of your budget with 3% down and a 1.2% PMI rate rarely is.
Monthly PMI = loan × annual PMI rate ÷ 12; automatic termination at scheduled balance ≤ 78% of original valueSource: Homeowners Protection Act of 1998, 12 U.S.C. §4901 et seq.; Urban Institute Housing Finance Policy Center PMI pricing data.
Worked example
A $400,000 home with 10% down at 6.5%, PMI priced at 0.55% a year.
- Loan is $360,000, so annual PMI is $1,980.
- Monthly PMI = $1,980 ÷ 12 = $165.
- The scheduled balance reaches 78% of $400,000 — $312,000 — after roughly 9.4 years.
- With 3% appreciation, the 80% current-value threshold arrives around year 4.
$165 a month, cancellable on request years earlier than the automatic date if the home appreciates and you ask for a new appraisal.
Frequently asked questions
How do I get rid of PMI early?+
Pay the balance to 80% of the original value and request cancellation in writing, or order an appraisal once appreciation puts current LTV at 80% and ask your servicer.
Is FHA mortgage insurance the same thing?+
No. FHA charges MIP, which on most loans lasts the life of the loan regardless of equity. Only refinancing into a conventional loan removes it.
Is single-premium PMI a better deal?+
It can be if you keep the loan long enough. Paying it upfront costs cash at closing and is generally not refundable if you sell early.
Does PMI ever help the borrower?+
Only indirectly, by making a low-down-payment loan possible at all. It pays the lender if you default; it does not protect your equity.
Last reviewed September 1, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.