This PMI calculator estimates your monthly private mortgage insurance cost, your total PMI expense over time, and the date your loan balance reaches 80% of your home’s value — the threshold at which you can request PMI removal. To see your full monthly housing cost including PMI, visit our Mortgage Calculator.

What Private Mortgage Insurance Actually Costs You

Private mortgage insurance typically costs between 0.5% and 1.5% of your loan amount per year, paid monthly as part of your mortgage payment. On a $350,000 loan with a 0.85% PMI rate, that is $248 per month — nearly $3,000 per year — added to your housing cost for insurance that protects your lender, not you. Most buyers who pay PMI do not realize that every dollar of it builds zero equity and provides zero benefit to them personally if they default.

PMI exists because lenders view loans with less than 20% down as higher risk. When you put down less than 20%, you have limited equity as a buffer against potential loss — so the lender requires you to pay for insurance that reimburses them if you default and the foreclosure sale does not cover the outstanding balance. The Federal Housing Administration reports that approximately 35% of all purchase mortgages originated in recent years include PMI or a government equivalent — meaning millions of buyers pay this cost monthly without always understanding when it ends.

The PMI calculator shows you two numbers that most lenders never highlight clearly: your total PMI cost over the life of the insurance and the exact month your loan balance is projected to reach 80% loan-to-value — the federal legal threshold at which you can request cancellation. Knowing both numbers turns PMI from a vague ongoing cost into a defined expense with a specific end date.

Monthly PMI Impact on Budget — On a $300,000 loan with 10% down at a 0.90% PMI rate, your monthly PMI is $225. Combined with your principal, interest, taxes, and insurance, PMI can push your total monthly housing cost $225 higher than it would be at 20% down — a difference that affects your debt-to-income ratio and your monthly cash flow simultaneously.

Total PMI Cost Before Removal — A buyer who puts 10% down on a $350,000 home and reaches 20% equity through normal amortization pays PMI for approximately 8 to 9 years on a 30-year loan at current rates. At $248 per month, that is approximately $24,000 to $26,000 in total PMI payments — money that disappears with no return to the buyer.

Automatic Cancellation Date — Under the Homeowners Protection Act, lenders must automatically cancel PMI when your loan balance reaches 78% of the original purchase price based on your scheduled amortization — even if you do not request it. The PMI calculator projects this date precisely so you can plan around it rather than wait passively for your lender to act.

Removal Request at 80% LTV — You have the legal right to request PMI cancellation once your loan balance reaches 80% of the original purchase price — earlier than the automatic 78% threshold. On a $350,000 home, 80% LTV corresponds to a balance of $280,000. Reaching this threshold faster through extra principal payments can save thousands in PMI costs.

PMI Rate Variation by Down Payment and Credit — PMI rates are not flat — they vary based on your down payment percentage, credit score, loan type, and insurer. A borrower with a 720 credit score and 10% down might pay 0.70% annually while a borrower with a 680 score and 5% down might pay 1.30% — nearly double. Running the PMI calculator with your specific rate gives you a more accurate cost projection than industry averages.

Drawbacks of Private Mortgage Insurance

PMI provides no benefit to you as the borrower under any circumstance. If you default, PMI pays your lender — not you. If you sell at a loss, PMI covers your lender’s shortfall — not yours. You pay for it every month and receive nothing in return for that payment. It is a pure lender-protection cost that you bear because your equity position does not yet meet their risk threshold.

PMI removal is not always automatic at 80% LTV — it requires a formal written request to your servicer, and some servicers require a new appraisal at your expense to confirm the current value supports the requested LTV. If your home has appreciated significantly, you may reach 80% LTV years earlier than your scheduled amortization suggests — but without requesting removal and providing evidence of value, your servicer will continue charging PMI until the scheduled automatic cancellation at 78%.

Lender-paid PMI — where the lender covers the PMI cost in exchange for a higher interest rate — appears to eliminate PMI but does not. You pay the equivalent cost through a higher rate for the entire loan term, not just until you reach 20% equity. Unlike borrower-paid PMI which ends when your equity threshold is met, the rate premium from lender-paid PMI never goes away unless you refinance. Over a 30-year loan, lender-paid PMI almost always costs more than borrower-paid PMI for buyers with sufficient equity-building timelines. For a full view of how PMI affects your total monthly payment and when removal changes your housing cost, visit the Mortgage Points Calculator.

Loan-to-Value Ratio Method

The PMI calculator uses the loan-to-value ratio method to determine your PMI cost and removal timeline. It calculates your current LTV as the outstanding loan balance divided by the original appraised value, expressed as a percentage. Your monthly PMI cost equals your loan balance multiplied by your annual PMI rate divided by 12. The calculator then runs your amortization schedule forward month by month — tracking the declining balance against the original purchase price — until the balance reaches 80% LTV for your request date and 78% LTV for the automatic cancellation date. It assumes your PMI rate remains constant, your property value stays at the original purchase price for LTV calculation purposes, and you make no extra principal payments unless specified.

Piggyback Loan Method

A piggyback loan — also called an 80-10-10 — is an alternative structure that eliminates PMI entirely by combining two loans at origination: a primary mortgage covering 80% of the purchase price and a second mortgage covering 10%, with the buyer contributing 10% as a down payment. Because the primary mortgage never exceeds 80% LTV, PMI is never triggered.

The piggyback method suits buyers with strong credit who qualify for competitive second mortgage rates and want to avoid PMI entirely from day one. The standard PMI method suits buyers who cannot qualify for a second mortgage, prefer simplicity of a single loan, or plan to build equity quickly through extra payments and remove PMI within a few years. The piggyback structure typically carries a higher second mortgage rate — often 1% to 3% above the primary rate — so the net monthly cost versus PMI depends on your specific rates, loan amounts, and how quickly you would otherwise reach 20% equity.

Tips for Managing Private Mortgage Insurance

Calculate your PMI removal date before your first mortgage payment — Most buyers treat PMI as an indefinite cost. Running the PMI calculator at origination gives you the exact month your balance reaches 80% LTV under the standard schedule — setting a clear target date that you can work toward or accelerate through extra payments.

Request PMI cancellation in writing as soon as your balance reaches 80% LTV — Your servicer will not automatically cancel at 80% — federal law only requires automatic cancellation at 78%. Submitting a written cancellation request the month your balance crosses 80% eliminates the additional payments between 80% and 78% — typically 12 to 18 extra months of PMI depending on your loan balance and rate.

Put extra principal payments toward PMI elimination as your first savings goal — An extra $200 per month in principal on a $300,000 loan with a 5% down payment accelerates the 80% LTV date by approximately 3 years. At $225 per month in PMI savings, you recover the extra payment cost within 3 months of early removal and bank 33 months of pure savings.

Track your home’s market value separately from your original purchase price — If your home has appreciated significantly, your current LTV based on market value may already be below 80% even if your scheduled amortization has not reached that point. Request a formal appraisal — typically $400 to $600 — and submit it with your PMI cancellation request. If the appraisal supports the lower LTV, your servicer must consider the cancellation request under federal guidelines.

Run the PMI calculator before deciding between 10% and 20% down — The decision to put 10% down and pay PMI versus waiting to save 20% is a financial calculation, not a simple rule. PMI sometimes costs less per month than the rent you would pay while saving the additional down payment — particularly in markets where rents are rising faster than your savings rate. The calculator makes this comparison concrete with actual dollar amounts.

Dealing with a Servicer Who Refuses to Remove PMI at 80% LTV

Submit your cancellation request in certified writing with your loan account number and current balance — Servicers sometimes delay or ignore verbal PMI cancellation requests. A written request sent via certified mail creates a legal record and triggers the servicer’s obligation to respond within 30 days under the Homeowners Protection Act. Include your loan number, the current balance confirming 80% LTV, and a specific request date for cancellation.

Order an independent appraisal if your servicer requires one and disputes your estimated value — If your servicer requires an appraisal to confirm LTV and their approved appraiser produces a value you believe is below market, you can request a second appraisal from a lender-approved appraiser of your choosing. A difference of $15,000 in appraised value on a $350,000 home shifts your LTV by approximately 4 percentage points — enough to determine whether PMI removal is approved or denied.

Refinance to remove PMI if your equity position has strengthened significantly through appreciation — If your home has appreciated enough that your current LTV is well below 80% based on market value, refinancing into a new loan at the lower LTV eliminates PMI permanently — and may also reduce your interest rate if current rates are favorable. Use the Refinance Calculator to calculate whether the rate reduction and PMI elimination together justify the closing costs of a refinance.

File a complaint with the Consumer Financial Protection Bureau if your servicer continues charging PMI after your legal cancellation date — The Homeowners Protection Act gives you federal legal rights regarding PMI cancellation. If your servicer continues charging PMI after you have met the 80% LTV threshold with proper documentation and submitted a written request, filing a CFPB complaint typically produces a rapid response from the servicer and retroactive PMI refunds for months charged after your legal cancellation date.

Related: Home Affordability Calculator | Adjustable-Rate Mortgage Calculator