PMI Calculator

The PMI Calculator estimates your monthly private mortgage insurance (PMI) premium and, more importantly, pinpoints when you can stop paying it. When your down payment on a conventional loan is under 20%, lenders add PMI to your monthly payment. This tool walks your amortization schedule month by month to find the exact dates you reach the two equity milestones that remove PMI — the 80% loan-to-value point where you can request cancellation, and the 78% LTV point where it terminates automatically — and shows your total PMI cost and the savings from cancelling early.

What is PMI (Private Mortgage Insurance)?

Private mortgage insurance is a policy that conventional mortgage lenders require when you borrow more than 80% of a home's value — that is, when your down payment is less than 20%. PMI protects the lender against loss if you default; it does not protect you or your equity. The premium is bundled into your monthly mortgage payment and falls away once you have built enough equity in the home.

PMI Formula

The monthly premium is simply the annual PMI rate applied to your loan amount, divided across twelve months:

The cancellation dates depend on your loan-to-value ratio (LTV), which is the remaining loan balance divided by the original home value. As you pay down principal each month, your balance — and your LTV — drops:

When Can You Cancel PMI?

The U.S. Homeowners Protection Act of 1998 defines two key thresholds, both measured against the original value of your home using the original payment schedule:

• 80% LTV — Borrower-requested cancellation: Once your balance is scheduled to reach 80% of the original value, you may send your servicer a written request to cancel PMI. You typically need a good payment history and no second mortgage.
• 78% LTV — Automatic termination: Your servicer is legally required to terminate PMI automatically once the balance reaches 78% of the original value, provided your payments are current. No request is needed.
• Midpoint rule: If for some reason you never reach 78% (for example, on certain long or interest-only loans), PMI must end at the loan's amortization midpoint.

Requesting cancellation at 80% rather than waiting for automatic termination at 78% removes PMI a few months earlier — which is exactly the early-cancellation saving this calculator highlights.

How Much Does PMI Cost?

Annual PMI rates generally range from about 0.3% to 1.5% of the loan amount. Your rate depends mostly on your loan-to-value ratio and credit score — a smaller down payment and a lower credit score both raise the rate. The table below shows typical mid-range rates by starting LTV (used as the default when you leave the PMI rate blank):

These are estimates only. Your lender's PMI quote is based on your specific credit profile and the mortgage insurer's rate card.

How to Get Rid of PMI Faster

PMI vs FHA Mortgage Insurance (MIP)

PMI applies to conventional loans and can be cancelled once you reach 20% equity. FHA loans instead carry a Mortgage Insurance Premium (MIP) that, for most borrowers putting down less than 10%, lasts the entire life of the loan — the only way to remove it is to refinance into a conventional mortgage. If you are comparing loan types, factor in that conventional PMI is temporary while FHA MIP often is not. This calculator models conventional PMI.

How to Use This Calculator

1. Enter your home price and down payment: Type the purchase price, then your down payment as a percent or a dollar amount.
2. Enter your loan details: Pick the loan term, enter the interest rate, and optionally enter your annual PMI rate (leave it blank to use an estimate based on your LTV).
3. Click Calculate: The tool computes your monthly PMI and the full cancellation timeline.
4. Review your results: See your monthly PMI, the date you can request cancellation, the automatic-termination date, your total PMI cost, your early-cancellation savings, and a year-by-year LTV schedule.

Frequently Asked Questions

What is PMI (private mortgage insurance)?

PMI is an insurance premium that conventional mortgage lenders require when your down payment is less than 20% of the home price. It protects the lender, not you, if you default. PMI is added to your monthly mortgage payment until you build enough equity to remove it.

How much does PMI cost per month?

PMI typically costs between 0.3% and 1.5% of the loan amount per year, divided into monthly payments. The exact rate depends on your loan-to-value ratio, credit score, and loan type. On a $300,000 loan at 0.5%, PMI is about $125 per month.

When can I cancel PMI?

Under the Homeowners Protection Act, you can request PMI cancellation in writing once your loan balance reaches 80% of the original home value. Your servicer must automatically terminate PMI when the balance reaches 78% of the original value, based on the original amortization schedule, as long as your payments are current.

How do I get rid of PMI faster?

You can reach 80% loan-to-value sooner by making extra principal payments, paying a larger down payment up front, or requesting a new appraisal if your home value has risen. Refinancing into a new loan without PMI is another option once you have at least 20% equity.

What is the difference between 80% and 78% LTV for PMI?

At 80% loan-to-value you may request that your servicer cancel PMI. At 78% loan-to-value the servicer must cancel it automatically without any request from you. Requesting cancellation at 80% removes PMI earlier and saves you several months of premiums.

Is PMI the same as FHA mortgage insurance?

No. PMI applies to conventional loans and can be cancelled once you reach 20% equity. FHA loans carry a mortgage insurance premium (MIP) that often lasts the life of the loan unless you refinance into a conventional mortgage. This calculator models conventional PMI.

Additional Resources

• Lenders Mortgage Insurance - Wikipedia
• When can I remove PMI? - Consumer Financial Protection Bureau