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PMI Calculator
Calculate your monthly PMI cost and find out exactly when you can stop paying private mortgage insurance.
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Monthly PMI
Annual PMI Cost
Months Until PMI Drops
Total PMI Paid
Loan Amount
Calculated in your browser. We never see your numbers.
How to Use This Calculator
Enter your home price, down payment percentage, annual PMI rate (typically 0.5%–1.5%), loan term, and interest rate. Click Calculate to see your monthly PMI payment, annual PMI cost, how many months until PMI automatically drops, total PMI paid over that period, and your loan amount.
PMI Calculation Formula
Monthly PMI is calculated as: Monthly PMI = Loan Amount × (Annual PMI Rate ÷ 100) ÷ 12. Your loan amount is your home price minus your down payment. PMI drops when your remaining loan balance reaches 80% of the original home price. The calculator runs a full amortization schedule to determine exactly when that threshold is crossed, accounting for every principal and interest payment along the way.
Understanding Loan-to-Value (LTV)
Loan-to-Value ratio (LTV) is the percentage of your home's value that you owe. At purchase with a 5% down payment, your LTV is 95%. PMI is required until your LTV drops to 80% — meaning you have 20% equity. The faster you pay down principal (through regular payments or extra payments), the sooner you'll reach the 80% LTV threshold and can stop paying PMI.
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Frequently Asked Questions
What is PMI (Private Mortgage Insurance)?
Private Mortgage Insurance (PMI) is a type of insurance that lenders require when a homebuyer makes a down payment of less than 20% of the home's purchase price. PMI protects the lender — not the buyer — if the borrower defaults on the loan. It is an additional monthly cost added to your mortgage payment until your loan balance reaches 80% of the home's original value.
When is PMI required?
PMI is typically required on conventional loans when your down payment is less than 20% of the home's purchase price. If you put down 5% on a $300,000 home, your lender will likely require PMI because you have only 5% equity. Government-backed loans like FHA loans have their own mortgage insurance requirements (MIP) that work differently. Once your equity reaches 20%, you can request PMI removal.
How can I avoid paying PMI?
The most straightforward way to avoid PMI is to make a down payment of 20% or more. Other options include: a piggyback loan (80/10/10 structure), where you take a second loan to cover part of the down payment; VA loans, which don't require PMI for eligible veterans; or USDA loans for rural properties. Some lenders offer lender-paid PMI (LPMI) in exchange for a slightly higher interest rate.
When does PMI drop off?
Under the Homeowners Protection Act, lenders must automatically cancel PMI when your loan balance reaches 78% of the home's original purchase price (assuming you're current on payments). You can also request cancellation once you reach 80% LTV (loan-to-value ratio). Some lenders allow earlier removal if you can demonstrate a significant increase in your home's value through a new appraisal. This calculator shows you exactly how many months until you hit the 80% threshold.
How much does PMI typically cost?
PMI typically costs between 0.5% and 1.5% of the original loan amount per year, depending on your credit score, down payment amount, and lender. For a $285,000 loan at a 0.85% PMI rate, the monthly cost would be about $201.88. Borrowers with higher credit scores and larger down payments (closer to 20%) generally qualify for lower PMI rates. Over the life of the loan before PMI drops, you could pay thousands of dollars in total.
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