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Pmi Calculator
PMI typically drops off automatically once the loan balance reaches 78% of the original home value, or after 11 years — whichever comes first. Borrowers can request cancellation at 80% LTV.
Calculate Private Mortgage Insurance (PMI) cost on a conventional loan with under 20% down, and project when it auto-cancels. Tool uses a credit-score × LTV (Loan-to-Value) matrix: excellent credit (760+) gets PMI rates of 0.30-0.55% of loan annually; mid-credit (680-759) 0.55-0.95%; lower-credit (620-679) 0.95-1.50%. LTV matters too — 95% LTV (5% down) costs more than 90% LTV (10% down). Output: monthly PMI cost, total PMI paid until cancellation, and the payoff month when the loan reaches 78% LTV (federal Homeowners Protection Act auto-cancel threshold).
PMI is the biggest hidden cost of buying with under 20% down. On a $400,000 loan with 5% down, a 700-credit-score borrower pays about $200-300/month in PMI for ~7-9 years before automatic cancellation. That’s $20,000-30,000 in PMI over the life of the loan — money that benefits the lender, not the borrower. Compare to keeping the same money invested: borrowing $20,000 more at 7% mortgage rate to skip PMI saves the PMI cost but adds interest. The break-even depends on how long you stay in the home and prevailing rates.
Removal strategies: (1) Automatic cancellation at 78% LTV based on original amortization schedule — federally mandated, no action required. (2) Request removal at 80% LTV with an appraisal showing the home’s current value supports the calculation. Worth it if home values have risen — pay $400-600 for an appraisal, save $200-300/month for 1-2 years sooner than auto-cancel. (3) Refinance to a no-PMI conventional loanonce you’ve built 20% equity. (4) Lender-paid PMI (LPMI) rolled into a slightly higher rate — saves the visible monthly PMI but you can never cancel it; only worth it if you’ll refinance within 3-5 years anyway.
Nasıl Kullanılır
- Enter the home price and down payment amount (or %). Tool computes initial LTV.
- Pick your credit band: 760+, 720-759, 680-719, 620-679, or below 620.
- Enter the loan term (typically 30 years; 15-year loans have lower PMI but higher monthly P&I).
- Read monthly PMI cost, projected cancellation month (78% LTV federal auto-cancel), total PMI paid until cancellation.
- Compare scenarios: rerun with 10%, 15%, 20% down to see the PMI savings vs the bigger upfront payment.
- If considering refinance: rerun once you've made 24+ payments to see if requesting early cancellation at 80% LTV saves enough to justify a $400-600 appraisal.
Ne Zaman Kullanılır
- Pre-purchase planning when down payment is under 20% — knowing the PMI cost helps decide whether to delay buying and save more, or buy now and pay PMI.
- Comparing FHA vs conventional loan options — FHA has different mortgage insurance (MIP) that lasts longer and works differently.
- Considering refinance — if rates have dropped AND home value has risen, refinancing can eliminate PMI even before reaching 80% LTV.
- Budgeting for the first 5-10 years of homeownership when PMI affects monthly cash flow.
Ne Zaman Kullanılmaz
- VA loans (military) — no PMI required, but a one-time funding fee of 1.4-3.6% applies.
- USDA loans (rural) — no traditional PMI, but a 1% upfront guarantee fee + 0.35% annual fee for the life of the loan.
- FHA loans — uses MIP (mortgage insurance premium) which has different rules: upfront 1.75% + annual 0.85% that lasts for the life of the loan if down payment under 10%.
- Cash purchases — no loan, no PMI.
Yaygın Kullanım Senaryoları
- Verifying a number or output before passing it on
- Quick calculation during a typical workday
- Pre-decision sanity-check on inputs and outputs
- Educational use — demonstrating the underlying concept
Sık Sorulan Sorular
When is PMI required?
On conventional loans when the down payment is less than 20%. FHA loans have their own mortgage insurance (MIP) that behaves differently. VA loans and USDA loans don't require PMI but may have funding fees.
How much does PMI cost?
0.3% to 1.5% of the loan amount per year, depending on credit score and down payment size. A 680-credit-score borrower with 10% down on a $300,000 loan pays about $1,500-2,400 annually, or $125-200/month.
How do I remove PMI?
Three paths: (1) wait for automatic cancellation at 78% LTV based on original amortization, (2) request removal at 80% LTV after providing an appraisal showing current value, (3) refinance once you reach 20% equity.
Is PMI tax deductible?
It was deductible for tax years 2018-2021 under the Tax Cuts and Jobs Act, then extended through 2021. As of 2026, the deduction has expired and is not in effect unless Congress reinstates it. Don't plan on it.
Should I avoid PMI by waiting to save 20%?
Depends on home prices vs your savings rate. If home prices are rising 5-7%/year and you can save another $30K in 18 months, prices will have risen $30-40K — you might break even on the down-payment math but lose 18 months of building equity. If prices are flat, waiting is usually better. The break-even calculation: monthly home-price appreciation × home value vs monthly savings + avoided PMI cost. In hot markets, buy now and pay PMI; in cooling markets, wait.
What's the difference between PMI and lender-paid PMI (LPMI)?
PMI: you pay it monthly as a separate line item, can cancel at 80% LTV. LPMI: rolled into a slightly higher interest rate (typically 0.25-0.5% more), can NEVER cancel. LPMI is appealing because monthly payments are simpler but typically costs more over a 7+ year hold. Worth considering only if you plan to refinance or sell within 3-5 years (where the higher rate doesn't compound long enough to outweigh the saved $200/month). Run both scenarios in a mortgage calculator to compare.