REAL ESTATE
PMI Calculator - Private Mortgage Insurance Cost
By Worldtickers ·
Estimate your monthly PMI cost based on your loan amount, credit score, and down payment. Learn when you can remove PMI and strategies to avoid it entirely.
This pmi tool focuses on estimate your monthly PMI cost based on your loan amount, credit score, and down payment. Learn when you can remove PMI and strategies to avoid it entirely. Use it to compare borrowing costs, monthly payments, interest charges, payoff timelines, and refinance or repayment choices by changing the rate, term, balance, and payment assumptions.
PMI Calculator
PMI Calculator
Estimate Private Mortgage Insurance costs.
What Is PMI?
Private Mortgage Insurance, or PMI, is an insurance policy that protects your lender if you default on your mortgage. It is required on conventional loans when your down payment is less than 20% of the home's purchase price. PMI does not protect you as the borrower — it solely covers the lender's potential loss.
PMI adds a significant cost to your monthly housing payment, typically ranging from $100 to $300 or more per month depending on your loan amount, credit score, and down payment size. Unlike principal and interest, PMI builds no equity and provides no benefit to you beyond enabling you to buy a home with less than 20% down.
The good news is that PMI is not permanent. Federal law requires lenders to automatically terminate PMI when your loan balance reaches 78% of the original property value, and you can request removal when it reaches 80%. Improving your home's value through renovations or market appreciation can also provide a path to earlier PMI removal.
How to Use This Calculator
Enter your home price, down payment amount, and credit score range. The calculator estimates your monthly PMI cost based on typical rates for your profile and shows when you can expect to reach the 80% LTV threshold for PMI removal.
Home Price and Down Payment
Enter the purchase price of the home and your down payment as a dollar amount. The calculator determines your loan-to-value (LTV) ratio, which directly affects your PMI rate. A higher down payment reduces both the loan amount and the PMI rate, providing a double benefit.
Credit Score
Select the range that best represents your credit score. Higher scores result in lower PMI rates. Borrowers with scores above 760 get the best rates, while scores below 680 can result in PMI costs that are two to three times higher. If your score is close to a threshold, improving it before applying could save you significantly.
Formula
PMI is calculated as a percentage of the original loan amount per year, divided by 12 for the monthly payment: Monthly PMI = (Loan Amount × PMI Rate) / 12. The PMI rate is determined by the lender based on your LTV ratio and credit score.
The LTV ratio is: LTV = (Loan Amount / Home Price) × 100. Higher LTV ratios result in higher PMI rates because the lender faces greater risk. At 97% LTV (3% down), PMI rates are at their highest. At 85% LTV (15% down), rates are significantly lower.
To estimate when PMI will be removed, use: Years to 80% LTV = (Current Balance − Target Balance) / (Monthly Payment × Principal Ratio), where the target balance is 80% of the original home price and the principal ratio is the portion of each monthly payment that reduces the loan balance.
Examples
Example 1: 5% Down Payment with Good Credit
A $350,000 home with 5% down ($17,500) leaves a $332,500 loan at 95% LTV. With a credit score of 740, the PMI rate is approximately 0.6% annually. Monthly PMI cost: $332,500 × 0.006 / 12 = $166 per month. At this rate, reaching 80% LTV takes approximately 9 years through regular mortgage payments alone. Making an extra $200 per month toward principal reduces this to about 6 years.
Example 2: 10% Down Payment with Lower Credit
A $300,000 home with 10% down ($30,000) leaves a $270,000 loan at 90% LTV. With a credit score of 680, the PMI rate is approximately 1.0% annually. Monthly PMI cost: $270,000 × 0.01 / 12 = $225 per month. Despite the smaller loan amount, the lower credit score results in higher PMI cost. Improving the credit score to 740 before applying could reduce PMI to about $135 per month, saving $90 per month or $1,080 per year.
Example 3: Total PMI Cost Over Time
On a $320,000 loan with $175 per month in PMI, the total cost before PMI is automatically removed at 78% LTV is approximately $21,000 over 10 years. This is money that builds zero equity and provides no benefit to you. By putting an additional $300 per month toward principal, you could reach the 80% threshold in about 6 years, reducing total PMI cost to approximately $12,600 — saving $8,400.
Tips
Put Down 20% If You Can
The most effective way to avoid PMI entirely is to put down 20% or more. On a $350,000 home, that means $70,000 down. While this is a significant amount, it eliminates PMI entirely and reduces your monthly payment by $150 to $300 or more. If you cannot reach 20%, every additional dollar of down payment reduces your PMI rate.
Improve Your Credit Before Applying
PMI rates vary dramatically by credit score. Moving from a 680 to a 740 score can cut your PMI cost in half. Before applying for a mortgage, check your credit report, dispute errors, pay down credit card balances, and avoid new credit inquiries. Even a small score improvement can save thousands in PMI costs over the life of the loan.
Request PMI Removal at 80% LTV
Lenders are required to automatically terminate PMI at 78% LTV, but you can request removal at 80% LTV by contacting your servicer. You may need to provide evidence of the home's value through a new appraisal. If your home has appreciated significantly, you may reach 20% equity sooner than expected. Keep track of your loan balance and home value to know when to request removal.
Consider Lender-Paid PMI
Some lenders offer lender-paid mortgage insurance (LPMI), where the PMI cost is rolled into a slightly higher interest rate. This eliminates the separate PMI payment but increases your rate for the life of the loan. LPMI can be advantageous if you plan to stay in the home long enough for the rate increase to cost less than traditional PMI, or if you expect to refinance before the break-even point.
FAQ
When do I have to pay PMI?
You typically must pay PMI when your down payment is less than 20% of the home's purchase price on a conventional loan. PMI protects the lender (not you) in case you default. FHA loans have their own mortgage insurance premium (MIP) regardless of down payment. VA loans do not require PMI but have a funding fee instead.
How much does PMI cost per month?
PMI typically costs between 0.5% and 1.5% of the original loan amount per year, divided into monthly payments. The exact rate depends on your credit score, down payment size, and loan type. For example, on a $300,000 loan, PMI might range from $125 to $375 per month. Borrowers with credit scores above 760 and larger down payments get the lowest rates.
How do I remove PMI from my mortgage?
You can request PMI removal when your loan balance reaches 80% of the original property value (based on the lower of the purchase price or appraised value at closing). Lenders are also required to automatically terminate PMI when the balance reaches 78%. You may also request removal based on current value if you have 20% equity, but you may need to pay for a new appraisal.
Does PMI build equity like principal payments?
No. PMI is pure insurance cost — it does not reduce your loan balance or build any equity. It is money paid to the insurance company to protect the lender. This is why eliminating PMI should be a priority. Every dollar spent on PMI is a dollar that could have gone toward building your equity through extra principal payments.
Is PMI tax deductible?
PMI was previously tax deductible under certain income limits, but this deduction has expired and been extended multiple times. As of 2026, the PMI tax deduction has not been renewed and is generally not available. Check current tax law or consult a tax professional for the most up-to-date information on deductibility.
What is the difference between PMI and MIP?
PMI (Private Mortgage Insurance) applies to conventional loans and can be removed once you reach 20% equity. MIP (Mortgage Insurance Premium) applies to FHA loans and typically cannot be removed for the life of the loan if your down payment is less than 10%. If you put down 10% or more on an FHA loan, MIP drops after 11 years. VA loans do not require either.
Can I avoid PMI without putting 20% down?
Yes, several options exist. A lender-paid mortgage insurance (LPMI) option rolls the PMI cost into a slightly higher interest rate, eliminating the separate PMI payment but increasing your rate for the life of the loan. piggyback loans (80-10-10 structure) use a second mortgage to cover part of the down payment. Some credit unions and portfolio lenders offer programs without PMI. Each option has trade-offs that should be carefully evaluated.
How does my credit score affect PMI cost?
Credit score has a significant impact on PMI rates. Borrowers with credit scores of 760 or above typically pay the lowest PMI rates (around 0.5% of the loan annually). Scores below 680 can result in PMI rates of 1% to 1.5% or higher. On a $300,000 loan, the difference between a 760 score and a 660 score could mean paying $200 more per month in PMI. Improving your credit before applying can save thousands over time.