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PMI Calculator
A PMI calculator estimates your private mortgage insurance. Enter the home's value and your loan amount, and it works out your loan-to-value ratio, your down payment, and your monthly PMI cost — and shows when PMI drops away, which is when your loan falls to 80% of the home's value or less.
FHA loans use mortgage insurance premiums (MIP) instead of PMI: 1.75% upfront plus an annual premium, usually 0.55%. Switching loan type resets the rate to the usual figure — edit it if your lender quoted a different rate.
Sets the loan amount to that share of the home value.
| Loan-to-value (LTV) | |
| Down payment | |
| Down payment % | |
| PMI per year | |
| PMI per month | |
| Upfront MIP (FHA only) |
How it works
Private mortgage insurance, or PMI, is insurance that protects the lender — not you — if you stop paying your mortgage. Lenders usually require it when your down payment is less than 20% of the home's value, because a small down payment leaves the lender with less cushion if the home has to be sold. You pay the premium, usually as part of your monthly mortgage payment, even though the lender is the one protected.
Your home value is the purchase price or appraised value of the home, and your loan amount is what you borrow. The loan-to-value ratio, or LTV, is the loan divided by the home value: a $340,000 loan on a $375,000 home is an LTV of about 90.67%. Your down payment is the home value minus the loan. The annual PMI rate is what the lender charges each year as a percentage of the loan — this calculator uses 0.5% a year as the default assumption, which is a common figure, but real rates vary by lender, credit score, and down payment, typically from about 0.3% to 1.5% a year.
The formulas are:
Down payment = Home value − Loan amount
Monthly PMI = Loan amount × annual PMI rate ÷ 12, if LTV is above 80%
Monthly PMI = $0, if LTV is 80% or below
FHA loans work differently. Instead of PMI they charge mortgage insurance premiums (MIP): 1.75% of the loan upfront — usually added to the loan balance — plus an annual premium, usually 0.55% of the loan a year, paid monthly. Unlike conventional PMI, FHA MIP does not stop when the LTV reaches 80%: with a down payment under 10% it usually lasts the life of the loan, and with a down payment of 10% or more it usually lasts 11 years. Choose the FHA loan type above to see both charges.
PMI is not forever. Once your LTV falls to 80% — through monthly payments, a larger down payment, or a rise in the home's value — you can usually ask the lender to remove it, and lenders are generally required to remove it automatically once the LTV reaches 78% on a standard loan. That is why a bigger down payment can pay off twice: it lowers your loan and it can remove a monthly PMI charge of well over $100. Always check your own loan terms, because the exact removal rules depend on the loan type.
Worked example
A buyer purchases a home worth $375,000 with a loan of $340,000. What is the PMI?
First, the LTV is $340,000 ÷ $375,000 × 100 = 90.67%. The down payment is $375,000 − $340,000 = $35,000, which is 9.33% of the home's value.
Because the LTV is above 80%, PMI applies. At the default annual PMI rate of 0.5%, the yearly PMI is $340,000 × 0.005 = $1,700, and the monthly PMI is $1,700 ÷ 12 = $141.67 a month.
If the same buyer borrowed only $300,000 instead, the LTV would be $300,000 ÷ $375,000 × 100 = 80%, the down payment would be $75,000, and the PMI would be $0 a month — saving $141.67 every month, or about $1,700 a year.
FAQ
What is PMI?
Private mortgage insurance protects the lender if you stop paying your mortgage. Lenders usually require it when your down payment is less than 20% of the home's value.
When does PMI go away?
You can usually ask for PMI to be removed once your loan-to-value ratio reaches 80%, and lenders are generally required to remove it automatically at 78% on a standard loan. Check your own loan terms for the exact rules.
How much does PMI cost?
PMI typically costs about 0.3% to 1.5% of the loan amount per year, depending on your credit score, down payment, and lender. This calculator uses 0.5% a year as the default assumption.
Is PMI the same as homeowners insurance?
No. Homeowners insurance protects your home against damage, while PMI protects the lender if you default on the loan. They are separate charges.
Can I avoid PMI?
Yes, usually by making a down payment of at least 20%, which brings the LTV to 80% or below. Some loan types have their own insurance rules that work differently.
What is the difference between PMI and FHA MIP?
PMI is the insurance on a conventional loan: it stops once the loan-to-value ratio reaches 80%. FHA MIP is the insurance on an FHA loan: 1.75% of the loan upfront plus an annual premium, usually 0.55%, and it does not stop at 80% — with a down payment under 10% it usually lasts the life of the loan. On a $340,000 loan, FHA MIP is about $155.83 a month plus $5,950 upfront, against $141.67 a month for conventional PMI at 0.5%.