PMI Calculator

About the PMI Calculator

Private mortgage insurance is what a lender charges on a conventional loan whenever you put less than 20% down. It protects the lender — not you — but you are the paying party, and it can run $30 to $400 a month depending on the loan, credit and LTV.

Federal law (the Homeowners Protection Act) matters here in two ways: at 78% of the original home value, PMI terminates automatically; and once you reach 20% equity you can request removal in writing — with a current appraisal as the trigger. This tool prices PMI and marks the equity checkpoints you should hold yourself to.

The formula behind it

PMI comes directly from a rate on the loan:

Typical conventional-loan PMI rates are 0.3%–1.5% per year of the loan balance, tiered by credit score and loan-to-value. The commonly quoted rule: request removal when the loan balance is at or below 80% of the home’s original value; automatic cancellation comes at 78% without doing anything (assuming a clean payment history).

Worked example

Defaults — a $280,000 home with $28,000 down (90% LTV):

1. You finance $252,000.
2. At a 0.5% annual PMI rate, the insurance charge runs $1,260/yr → $105 a month.
3. To fall under the 80% removal threshold you need the balance down to $224,000 — about $28,000 of paydown (or a rise in the home’s value).

What moves the result

• Down payment — each point of LTV matters: PMI pricing tiers fall sharply as LTV drops below 85%, 80% and 75%.
• Credit score — borrowers with top credit tiers often pay less than half what lower-tier borrowers frequency do.
• Loan type — FHA loans use MIP (different rules; most borrowers pay it for the life of the loan unless refinancing).
• Home value growth — rising prices shorten how long you carry PMI because you can request a new appraisal.

Practical tips

• Write the removal request letter when you cross 80% LTV — servicers remove on request, not spontaneously. Include a payoff estimate or recent appraisal.
• Track your amortization schedule; crossing that 80% line can happen years before the automatic 78% trigger.
• Refinancing out of PMI for another loan can make sense once the rate also dropped — model both in one pass with the refinance calculator.
• If you are months from the pass, consider making one extra principal payment now rather than another year of PMI.
• When choosing between two houses, run both through this tool: a lower-LTV option can make up for a slightly higher base price.

Frequently asked questions