Introduction
Private Mortgage Insurance, or PMI, is an extra cost added to your monthly mortgage payment when you put down less than 20% on a home. Our PMI Calculator helps you figure out how much PMI you will pay each month and each year. Just enter your home price, down payment, and loan details, and the calculator does the math for you. Knowing your PMI cost ahead of time helps you plan your budget and decide if a bigger down payment makes sense. Once you build enough equity in your home — usually 20% — you can ask your lender to remove PMI and lower your monthly payment.
How to Use Our PMI Calculator
Enter your home loan details below to find out how much private mortgage insurance (PMI) you will pay each month and each year.
Home Price: Type in the total price of the home you want to buy. This is the full purchase price, not the amount you are borrowing. If you are still figuring out what you can afford, our Home Affordability Calculator can help you set a realistic budget.
Down Payment: Enter the amount of money you plan to pay upfront. If your down payment is less than 20% of the home price, you will likely need to pay PMI.
Loan Amount: This is the total amount you need to borrow. It equals the home price minus your down payment.
PMI Rate: Enter the annual PMI rate as a percentage. Most PMI rates fall between 0.5% and 1.5% of the loan amount per year. Your rate depends on your credit score and down payment size.
Loan Term: Choose how many years your mortgage will last. Common options are 15 years or 30 years.
Interest Rate: Enter the annual interest rate on your mortgage. This is the rate your lender charges you to borrow the money. If you want to understand the true cost of your loan including fees, our APR Calculator can help.
Once you fill in these fields, the calculator will show you your monthly PMI cost, your total monthly mortgage payment including PMI, and when you can expect PMI to drop off. PMI is removed once your loan balance reaches 80% of the original home value, so the calculator will also tell you how many months it takes to reach that point.
What Is PMI (Private Mortgage Insurance)?
Private Mortgage Insurance, or PMI, is an extra fee your lender charges when you buy a home with a down payment of less than 20%. It protects the lender — not you — in case you stop making payments on your loan. Even though PMI does not benefit you directly, it makes it possible to buy a home without saving up a full 20% down payment.
How Is PMI Calculated?
PMI is calculated as a percentage of your original loan amount, not the home price. The annual PMI rate typically falls between 0.2% and 2.0%, depending on your credit score, the size of your down payment, and your lender. To find your monthly PMI cost, multiply your loan amount by the annual PMI rate, then divide by 12. For example, if you borrow $360,000 and your PMI rate is 0.50%, your annual PMI cost is $1,800, which works out to $150 per month added to your mortgage payment.
What Is LTV and Why Does It Matter?
LTV stands for Loan-to-Value ratio. It compares how much you owe on your home to how much the home is worth. You calculate it by dividing your loan amount by the home price. For instance, if you buy a $400,000 home with a $40,000 down payment, your loan is $360,000 and your LTV is 90%. Lenders use LTV to measure their risk — the higher your LTV, the riskier the loan is for them, which is exactly why PMI exists for loans above 80% LTV. Your LTV also plays a key role when calculating your debt-to-income ratio, which lenders use alongside LTV to approve your mortgage.
When Can You Remove PMI?
Under the Homeowners Protection Act, you have the right to request PMI removal once your loan balance drops to 80% of the original home value. Your lender is also required to automatically cancel PMI when your balance reaches 78% of the original value. You can reach these thresholds faster by making extra principal payments or by choosing a shorter loan term, such as 15 years instead of 30. Our Mortgage Extra Payment Calculator can show you exactly how much time and money extra payments save, while the Mortgage Payoff Calculator helps you plan a strategy for paying off your loan early and eliminating PMI sooner.
Ways to Avoid PMI Altogether
- Put 20% or more down. This is the most straightforward way to skip PMI entirely.
- Piggyback loan. Some borrowers take out a second, smaller loan to cover part of the down payment so the primary mortgage stays at or below 80% LTV. A HELOC Calculator can help you evaluate this option if you already own a home.
- Lender-paid PMI (LPMI). Your lender covers PMI in exchange for a slightly higher interest rate. You pay more over time, but there is no separate PMI charge.
- VA or USDA loans. These government-backed loans do not require PMI, though they may have other fees.
How to Use This Calculator
Enter your home price, down payment, loan term, interest rate, and estimated PMI rate. The calculator will show your monthly and annual PMI cost, how long you will pay PMI before it can be removed, and the total amount of PMI you will pay over that period. It also displays a year-by-year amortization schedule and a chart showing how your LTV ratio drops over time. The highlighted row in the schedule marks the year when PMI falls off, so you can clearly see how much of your money goes toward this extra cost and when it ends. For a broader view of the costs involved in purchasing a home, you may also want to use our Closing Cost Calculator and Property Tax Calculator.
Tips to Reduce Your PMI Costs
A higher credit score almost always means a lower PMI rate, so improving your credit before applying for a mortgage can save you hundreds of dollars each year. Making a larger down payment — even just a few extra percentage points — also reduces both the PMI rate and the loan amount it is based on, giving you a double benefit. Finally, once you believe your home has increased in value enough to bring your LTV below 80%, you can request a new appraisal and ask your lender to remove PMI early. If you are weighing whether to continue renting or buy with PMI, our Rent vs Buy Calculator can help you compare the long-term financial impact of each option. And if rates have dropped since you took out your loan, the Refinance Calculator can show you whether refinancing could eliminate PMI and reduce your overall costs.