PMI Calculator
Private mortgage insurance protects the lender and is paid by you. Work out what it costs, and — more usefully — the two different dates on which you can stop paying it.
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What PMI is for
Private mortgage insurance covers the lender against loss if you default. It is required on most conventional loans with less than 20% down, it is paid by the borrower, and it buys the borrower nothing except access to the loan.
That last point is worth being clear about, because the name suggests otherwise. It is not homeowners insurance, it is not life insurance, and it does not protect you if you cannot pay.
Two different cancellation rules
Under the Homeowners Protection Act, a conventional loan on a primary residence has two separate exits, and they arrive at different times.
You may request cancellation at 80%. Once the balance reaches 80% of the original value, you can ask in writing. The servicer must comply if you have a good payment history, the property has not fallen in value, and there are no junior liens.
The servicer must terminate at 78%. Automatic termination happens when the balance reaches 78% of the original value on the original amortization schedule — the schedule, not your actual balance. Extra payments do not accelerate this one.
The request route arrives first and requires you to act. The automatic route arrives later and requires nothing. The calculator dates both, because the gap between them is often more than a year of premiums.
The third route: appreciation
If the house has risen in value, the balance may be 80% of the current value long before it reaches 80% of the original. Servicers will often cancel on that basis, but it is not a statutory right: it usually requires a new appraisal you pay for, and there are typically seasoning requirements — a minimum time since the loan closed.
The calculator dates this route separately and marks it as the one that depends on your servicer rather than on the statute. It is frequently the fastest way out and it is the one you have to ask for.
Why there is no default PMI rate
PMI rates depend on credit score, loan-to-value, loan type, term, and the insurer. The spread between a strong file at 85% loan-to-value and a weaker one at 97% is several times over, not a few basis points.
There is no published national figure that would be true for you, so the rate here comes from your own Loan Estimate. A calculator that filled one in would be inventing your premium.
A worked example
A $395,000 purchase with 10% down, a $355,500 loan at 6.5% over 30 years, PMI at 0.55%, paying $150 extra each month, with 3% appreciation assumed.
The starting loan-to-value is 90%, so PMI is required, at $163 a month — about $1,955 a year. With the extra payments the balance reaches 80% of the original value in roughly seven years, and total PMI paid comes to around $13,400. Automatic termination on the original schedule would not arrive for about nine years, so requesting cancellation saves roughly two years of premiums.
On the appreciation route the loan reaches 80% of current value in under three years. Getting that recognised needs an appraisal and a servicer willing to act on it — but it is worth roughly $8,000 of premiums, which pays for a great many appraisals.
Is it worth avoiding altogether?
Not always. Waiting to reach 20% down means paying rent for longer and buying at whatever prices arrive in the meantime. PMI is the price of not waiting, and framed that way it is often a reasonable trade rather than a mistake.
What is worth avoiding is paying it longer than necessary. Diarise the request date, know your servicer's appraisal process, and treat the 80% point as an appointment rather than something that will happen to you.
What this does not cover
- FHA mortgage insurance. A different scheme with an upfront premium and an annual one, and on most FHA loans written today it lasts for the life of the loan. Nothing here applies to it.
- Lender-paid PMI. Built into a higher rate instead of a separate premium, and it never cancels.
- Single-premium PMI. Paid once at closing, which changes the arithmetic entirely.
- Investment and second homes. The statutory cancellation rules cover primary residences.
- Piggyback second mortgages. A way of avoiding PMI that substitutes a second loan and its own interest.
Check where your equity stands today with the home equity calculator. See our methodology for how these tools are built and tested.
Frequently asked questions
When does PMI automatically go away?
When the balance reaches 78% of the original value on the original amortization schedule, provided you are current on payments. The servicer must do this without being asked.
Note that it follows the schedule rather than your actual balance, so extra payments do not bring the automatic date forward. They do bring forward the 80% point at which you can request cancellation.
Can I cancel PMI early if my house has gone up in value?
Often yes, but it is not a statutory right — the request-at-80% rule is measured against the original value. Cancellation based on appreciation is at the servicer's discretion and usually requires a new appraisal you pay for, plus a minimum time since closing.
It is still frequently the fastest route out. Ask your servicer what their process and seasoning requirement are.
How much is PMI per month?
It depends on the annual rate your lender quotes, which depends on your credit score and loan-to-value. The monthly premium is the loan amount times the annual rate, divided by twelve.
There is no standard rate, which is why this calculator asks for yours from the Loan Estimate rather than filling one in.
Does paying extra get rid of PMI faster?
It brings forward the point at which you can request cancellation at 80% of the original value, which is a real saving. It does not move the automatic termination date, because that is computed on the original schedule.
Enter an extra monthly amount here to see how much earlier the request date arrives.
Is PMI tax deductible?
The deduction for mortgage insurance premiums has been available in some years and not others, and has been subject to income phase-outs when available.
We do not model it because its availability for a given year has to be confirmed, and it only helps itemizers. A tax professional can tell you whether it applies to you.
Is it better to wait until I have 20% down?
Not necessarily. Waiting means more rent and exposure to whatever prices do in the meantime, and PMI is often a smaller cost than either.
Run both: the total PMI figure here against the rent you would pay while saving. The answer depends on how far you are from 20% and how fast you are saving.
Related calculators
This calculator is provided for general educational and estimation purposes only and is not lending or legal advice. It models conventional private mortgage insurance only. FHA mortgage insurance follows different rules and on most loans written today does not cancel at all. Your servicer determines actual cancellation.