PMI Calculator
Buying with less than 20% down? See exactly what private mortgage insurance will cost you each month, how long you will pay it, and the month it finally drops off your loan.
How much is PMI per month, and when does it end?
Private mortgage insurance (PMI): Private mortgage insurance (PMI) is a monthly fee charged when a home buyer puts down less than 20%; it protects the lender until the loan balance falls to 80% of the home's value. On a $360,000 loan — a $400,000 home bought with 10% down — at a PMI rate of 0.55%, PMI costs $165.00 a month. Amortization alone brings the balance down to 80% of the price in about 95 months, so the total PMI bill lands around $15,675.
How to calculate PMI cost and its removal date
- Multiply the loan amount by the annual PMI rate and divide by 12 for the monthly PMI cost.
- Find the removal target: 80% of the home's purchase price.
- Step through the loan's amortization until the balance first falls to that target — that month is when PMI can come off.
- Multiply the monthly PMI by the number of months you will pay it for the total cost.
Source: CFPB — Owning a Home
Balance vs. the 80% line
PMI can be cancelled once your balance reaches 80% of the home's original price (78% triggers automatic termination under US law).
How this PMI calculator works
When a conventional mortgage is taken out with less than 20% down, the lender adds private mortgage insurance (PMI) — a policy that protects the lender, not you, if you default. It is priced as an annual percentage of the loan amount and billed monthly. This calculator takes your home price, down payment, rate and term, works out the loan, applies your PMI rate, and then simulates the amortization to find the exact month your balance crosses 80% of the home's original price — the point at which you gain the right to have PMI removed. Multiply the monthly PMI by the number of months and you get the true total cost, which surprises most buyers.
The PMI rate itself depends on your credit score and loan-to-value ratio: borrowers with strong credit putting 15–19% down may pay as little as ~0.3% a year, while 3–5% down with weaker credit can exceed 1.5%. If you do not know your rate, 0.55% is a reasonable mid-range estimate — and your lender's Loan Estimate document will state the exact figure.
Worked example
Buy a $400,000 home with 10% down: the loan is $360,000. At a PMI rate of 0.55%, monthly PMI is $360,000 × 0.55% ÷ 12 = $165.00. PMI falls away when the balance reaches 80% of $400,000, which is $320,000. On a 30-year loan at 6.5% APR, amortization alone takes about 95 months — just under eight years — to get there, so the total PMI bill lands around $15,675. That is the price of starting with 10% down instead of 20%, on top of the interest on the extra $40,000 borrowed. Run the defaults above to see the exact schedule this calculator produces.
Five ways to cut or kill PMI
- Reach 20% down. The only way to avoid PMI entirely on a conventional loan. On the example home, that means $80,000 instead of $40,000.
- Request cancellation at 80% LTV. Under the US Homeowners Protection Act, once your balance hits 80% of the original value you can ask — in writing — for PMI to be removed, provided you are current on payments. At 78% it must be terminated automatically.
- Use appreciation. If your home's value has risen, a new appraisal (typically $300–$600) may show you already have 20% equity. Some servicers accept this for cancellation after two years of payments.
- Make extra principal payments. Every extra dollar moves the 80% date closer and cuts both PMI duration and interest. Even $100 a month can pull the drop-off forward by more than a year on a typical loan.
- Compare structures honestly. Lender-paid PMI and single-premium PMI fold the cost into the rate or an upfront fee. They can suit short stays, but for most buyers monthly PMI that cancels at 80% is cheaper over time.
PMI vs. other loan types
FHA loans do not have PMI but charge a mortgage insurance premium (MIP) that usually lasts the life of the loan unless you put 10%+ down — often more expensive in the long run than conventional PMI that drops off. VA loans charge an upfront funding fee instead of monthly insurance, and USDA loans charge a smaller annual fee. To see PMI inside a complete monthly housing payment alongside taxes and insurance, use the full mortgage calculator.
Frequently asked questions
How is PMI calculated?
PMI is charged as an annual percentage of your loan amount, divided by 12 and added to your monthly payment. Rates typically run from about 0.3% to 1.5% per year depending on your credit score and how much you put down. Example: a $360,000 loan at a 0.55% PMI rate costs 360,000 × 0.0055 ÷ 12 = $165 per month.
When can I remove PMI?
On a conventional loan you can request cancellation once your balance reaches 80% of the home's original purchase price (or appraised value at origination), as long as you are current on payments. PMI must terminate automatically at 78%, and it also ends by law at the midpoint of the loan term if you are current.
Is PMI tax-deductible?
The PMI deduction has been extended and allowed to lapse several times by Congress, and when available it phases out for higher incomes. Tax rules change frequently — treat any PMI you pay as non-deductible for planning purposes and check the current year's rules or a tax professional for the latest position.
Can I avoid PMI with less than 20% down?
Sometimes: a piggyback (80-10-10) loan pairs an 80% first mortgage with a 10% second loan, VA and USDA loans use different fee structures instead of PMI, and some lenders offer lender-paid PMI in exchange for a higher rate. Each alternative has its own cost — compare the total in this calculator rather than assuming avoiding the PMI line automatically saves money.
Does PMI protect me if I can't pay?
No — this is the most common misunderstanding in mortgages. PMI protects the lender against loss if you default and the sale of the home does not cover the loan. You pay the premium, but the coverage is entirely for the bank's benefit.
Sources
- CFPB — Owning a Home — PMI rules under the Homeowners Protection Act: request removal at 80% loan-to-value; automatic termination at 78%.