PMI Calculator
Created by: James Porter
Last updated:
Enter your home price, down payment, PMI rate, and mortgage terms to see your monthly PMI cost, total PMI paid, and the exact month PMI automatically cancels when your balance reaches 80% of the original purchase price.
PMI Calculator
FinancePMI is required when your down payment is less than 20%. See the exact monthly cost and the month it automatically cancels at 80% LTV.
5.0% down — LTV 95.0%
Typical range: 0.50%–1.50% depending on credit score and LTV
What Is PMI and How Much Does It Cost?
Private mortgage insurance (PMI) is a monthly premium added to conventional mortgage payments when the borrower puts down less than 20%.
Unlike homeowner's insurance (which protects you) or FHA mortgage insurance (which funds a government program), PMI specifically protects the lender against losses if you stop making payments.
PMI is not permanent.
Under the Homeowners Protection Act, lenders must cancel it automatically when your loan balance amortizes down to 78% of the original purchase price.
You can request cancellation at 80%.
The total cost depends on your rate, loan size, and how quickly the balance pays down — which this calculator shows precisely.
How PMI Cost and Cancellation Are Calculated
Monthly PMI is straightforward: annual PMI rate × loan amount / 12.
The cancel month requires running the full amortization schedule and finding the month when the remaining balance first hits 80% of the original home price.
The calculator simulates this month-by-month to give you the exact date.
PMI Formulas
Monthly PMI = (loan amount × annual PMI rate) / 12
Annual PMI = loan amount × annual PMI rate
PMI cancel month = month when balance ≤ original home price × 80%
Total PMI paid = monthly PMI × cancel month
Example Scenarios
5% Down on a $350,000 Home
Down payment: $17,500. Loan: $332,500. PMI at 0.70%: $194/month. Mortgage at 7.0% for 30 years. PMI cancels at month 93 (year 7.75) when balance reaches $280,000 (80% of $350,000). Total PMI paid: $18,042. That's the true cost of the 5% vs 20% down payment decision, beyond just the larger loan balance.
Effect of Down Payment on PMI Duration
10% down ($35,000): Loan $315,000, PMI at 0.60% = $158/month. Cancels at month 77. Total PMI: $12,166. 15% down ($52,500): Loan $297,500, PMI at 0.50% = $124/month. Cancels at month 58. Total PMI: $7,192. Each 5% additional down payment dramatically shortens the PMI window.
How People Use This Calculator
- First-time buyers deciding between saving more for 20% down versus buying now with PMI.
- Homeowners tracking exactly when PMI will automatically cancel so they can plan around it.
- Buyers comparing the true cost of different down payment amounts including PMI duration.
- Anyone planning extra mortgage payments to cancel PMI early and calculating the break-even.
- Financial advisors modeling the full PITI payment for clients at various down payment levels.
Tips for Minimizing PMI Cost
Make extra principal payments in the early years of your loan.
Because most early payments go to interest, a relatively small extra payment can significantly accelerate when your balance crosses 80% LTV.
Use the mortgage prepayment calculator to find your optimal extra payment amount.
Request PMI cancellation — don't wait for automatic termination.
Once your balance is at or below 80% based on the original value, contact your servicer with a written cancellation request.
They must respond within 30 days under the Homeowners Protection Act.
You may also qualify for early cancellation if your home has appreciated substantially, but this requires a lender-approved appraisal.
Frequently Asked Questions
What is PMI and when is it required?
Private mortgage insurance (PMI) is insurance that protects the lender — not the borrower — if the borrower defaults on a conventional mortgage. Lenders require PMI when the down payment is less than 20% of the home's purchase price (i.e., the loan-to-value ratio is above 80%). PMI allows lenders to offer loans with smaller down payments by shifting some default risk to an insurance company.
How much does PMI cost?
PMI typically costs 0.50% to 1.50% of the original loan amount per year, depending on credit score, down payment, and loan type. For a $300,000 loan at 0.70% annual PMI, the monthly cost is $175. At 0.50%, it's $125/month. At 1.20%, it's $300/month. Higher credit scores and larger down payments qualify for lower PMI rates.
When does PMI automatically cancel?
Under the Homeowners Protection Act (HPA), lenders must automatically cancel PMI when your loan balance reaches 78% of the original purchase price and you are current on payments. You can request cancellation at 80% of the original value. The calculator shows the exact month this occurs based on your amortization schedule.
Can I cancel PMI early?
Yes, in two ways. First, make extra principal payments to reach 80% LTV sooner. Second, if your home has appreciated significantly, you can request a new appraisal and ask the lender to remove PMI based on the current value (though not all lenders allow this — it depends on your loan type and how long you have had the loan). FHA MIP works differently and generally cannot be cancelled without refinancing.
Is PMI tax deductible?
PMI deductibility has varied by year and income level. Through recent tax years, borrowers with AGI below $100,000 could potentially deduct PMI premiums as home mortgage interest, with the deduction phasing out above that threshold. Check current IRS guidance or consult a tax professional, as this deduction has expired and been renewed multiple times.
What is lender-paid PMI (LPMI)?
With lender-paid PMI, the lender covers the insurance premium in exchange for a higher interest rate on the loan. Your monthly payment has no separate PMI line item, but the rate is permanently higher. LPMI can be advantageous if you plan to refinance within a few years (before the higher rate accumulates enough extra interest to exceed the PMI you would have paid).
Sources and References
- Homeowners Protection Act of 1998 (HPA). Public Law 105-216. U.S. Congress.
- Consumer Financial Protection Bureau (CFPB). Private Mortgage Insurance (PMI). consumerfinance.gov.
- Urban Institute. The Effect of LTV Ratios on Mortgage Default Rates, 2022.