PMI Calculator - Calculate Private Mortgage Insurance
Free PMI calculator to determine monthly private mortgage insurance costs and when PMI ends at 80% loan-to-value
PMI Calculator
PMI Results
What is a PMI Calculator?
A PMI calculator is a free mortgage tool that calculates Private Mortgage Insurance costs when you put down less than 20% on a home purchase. It determines monthly PMI payments, annual costs, when PMI ends at 80% loan-to-value ratio, and total PMI paid over the insurance period.
This calculator helps with:
- True cost analysis - Calculate total monthly housing costs including PMI
- Budget planning - Determine if you can afford mortgage payment plus PMI
- PMI duration - Estimate when you'll reach 80% LTV and can cancel PMI
- 20% vs. lower down payment - Compare costs of PMI versus larger down payment
- Refinancing timing - Determine when appreciation allows refinancing without PMI
For complete mortgage payment calculations including PMI, use our mortgage calculator to see total monthly costs with principal, interest, taxes, insurance, and PMI combined.
When evaluating down payment strategies, our down payment calculator helps you compare 20% down (no PMI) versus lower down payments with PMI costs.
To calculate your current loan-to-value ratio and PMI eligibility, use our LTV calculator to determine when you can request PMI cancellation.
How PMI Calculation Works
PMI is calculated based on loan amount and annual rate:
Monthly PMI Formula:
Monthly PMI = (Loan Amount × PMI Rate) ÷ 12
Example: ($315,000 × 0.75%) ÷ 12 = $196.88/month
Loan-to-Value Ratio:
LTV = (Loan Amount ÷ Home Value) × 100
PMI required when LTV > 80%
PMI cancelled when LTV ≤ 80%
PMI Cancellation Timeline
Calculator estimates months until 80% LTV based on principal payments and property appreciation. Faster paydown or appreciation = earlier PMI cancellation.
Key PMI Concepts Explained
Private Mortgage Insurance
Insurance protecting lenders if borrowers default. Required for conventional loans with less than 20% down payment.
LTV Ratio
Loan-to-Value percentage. PMI required above 80% LTV, can be cancelled at 80%, automatically terminated at 78%.
Borrower-Paid PMI
Most common PMI type. You pay monthly premium added to mortgage payment. Cancellable when equity reaches 20%.
Lender-Paid PMI
Lender pays PMI in exchange for higher interest rate. Cannot be cancelled but may have lower initial payment.
How to Use This PMI Calculator
Enter Home Price
Input purchase price of home (e.g., $350,000)
Enter Down Payment
Input your down payment amount (e.g., $35,000)
Enter PMI Rate
Input PMI rate from lender (typically 0.5-1.5%)
Add Mortgage Details
Input interest rate and expected appreciation
Calculate PMI Costs
Click Calculate to see monthly PMI and timeline
Evaluate Options
Compare PMI costs versus larger down payment
Benefits of Using PMI Calculator
- • Complete Cost Picture: See total monthly housing costs including often-overlooked PMI expense.
- • Down Payment Strategy: Compare costs of different down payment amounts and PMI scenarios.
- • Cancellation Timeline: Know when you'll reach 80% LTV and can request PMI removal.
- • Total PMI Cost: Calculate lifetime PMI expense to inform down payment and loan decisions.
- • Refinancing Planning: Determine optimal timing for refinancing to eliminate PMI requirements.
- • Budget Accuracy: Plan true monthly housing expense including PMI for realistic budgeting.
Factors That Affect PMI
1. Down Payment Size
Lower down payment = higher LTV = higher PMI rate. 5% down typically costs more than 15% down.
2. Credit Score
Lower credit scores result in higher PMI rates. Excellent credit (740+) gets lowest rates, poor credit pays premium.
3. Loan Type
Fixed-rate mortgages typically have lower PMI than ARMs. Loan term also affects PMI rates.
4. Property Appreciation
Faster appreciation = quicker equity buildup = earlier PMI cancellation. Strong markets accelerate PMI removal.
5. Extra Principal Payments
Additional principal payments reduce loan balance faster, accelerating path to 80% LTV and PMI cancellation.
Frequently Asked Questions
What is PMI and when is it required?
Private Mortgage Insurance (PMI) is insurance that protects lenders if you default on your loan. It's required when your down payment is less than 20% of the home's purchase price. PMI typically costs 0.5-1.5% of the loan amount annually, paid monthly.
How much does PMI cost per month?
PMI typically costs $30-$70 per month for every $100,000 borrowed, depending on your credit score, loan-to-value ratio, and loan type. For a $300,000 loan with 0.75% PMI rate, expect approximately $187.50 monthly or $2,250 annually.
When can I cancel PMI?
You can request PMI cancellation when your loan-to-value ratio reaches 80% through principal payments or property appreciation. Lenders must automatically terminate PMI at 78% LTV. Some loans allow earlier cancellation with appraisal showing 80% LTV from appreciation.
Is PMI tax deductible?
PMI deductibility depends on your income and current tax laws. Historically, PMI was deductible for taxpayers earning under certain thresholds, but this provision expired in 2021. Check current IRS guidelines or consult a tax professional for your specific situation.
Can I avoid PMI?
Avoid PMI by: making 20% down payment, using piggyback loans (80-10-10), getting lender-paid PMI (higher interest rate), using VA loans (no PMI for veterans), or USDA loans (different mortgage insurance structure). Weigh costs and benefits of each option.