Private Mortgage Insurance (PMI) protects lenders when borrowers put less than 20% down. It's an additional monthly cost until sufficient equity is built.

How much does PMI cost?

PMI typically costs 0.5-1% of the loan amount annually, paid monthly. On a $300K loan, that's $125-250 per month.

When can I remove PMI?

PMI can be requested removed at 80% LTV and automatically terminates at 78% LTV. You can also remove it early through reappraisal if values have increased.

Should I put 20% down to avoid PMI?

Not necessarily. Calculate whether saving for 20% or paying PMI for a few years results in better overall position. Rising prices may favor buying sooner.

Free Calculator

PMI Calculator

Calculate your private mortgage insurance costs, see how credit score affects your rate, and find out when you can remove PMI from your loan.

Loan Details

Enter your mortgage information

Home Price ($)

Down Payment10% ($40,000)

3%20% = No PMI25%

Credit Score

Interest Rate (%)

Loan Term

Loan-to-Value (LTV)90.0%

0%80% (PMI removal)100%

PMI Required

Monthly PMI

$135.00

Annual PMI

$1,620

Principal & Interest$2,275.44

PMI+$135.00

Total Monthly (P&I + PMI)$2,410.44

PMI Removal Timeline

PMI can be removed after 95 months (7.9 years) when your loan balance reaches $320,000 (80% LTV).

Total PMI Cost$12,825

To avoid PMI entirely: Increase your down payment by $40,000 to reach 20%.

What is PMI?

Private Mortgage Insurance (PMI) protects the lender if you default on your loan. It's required when your down payment is less than 20%.

PMI does NOT protect you as the borrower - it only protects the lender.

How to Remove PMI

* Automatic: Removed at 78% LTV based on original schedule
* Request: You can request removal at 80% LTV
* Refinance: If home value increases, refinance to lower LTV
* Reappraisal: Get a new appraisal if home appreciated

PMI Alternatives

* Piggyback Loan: 80-10-10 loan structure
* LPMI: Lender-paid PMI (higher rate)
* VA Loan: No PMI for eligible veterans
* Save More: Wait until you have 20% down

How Credit Score Affects PMI Rates

Approximate annual PMI rates as percentage of loan amount

Credit Score	5% Down (95% LTV)	10% Down (90% LTV)	15% Down (85% LTV)
760+ (Excellent)	0.58%	0.3%	0.19%
740-759 (Very Good)	0.65%	0.35%	0.22%
720-739 (Good)	0.78%	0.45%	0.28%
700-719 (Fair)	0.95%	0.55%	0.37%
680-699 (Average)	1.1%	0.7%	0.48%
660-679 (Below Average)	1.35%	0.9%	0.65%
Below 660 (Poor)	1.55%	1.1%	0.85%

* Rates are estimates and vary by lender, loan type, and other factors. Actual rates may differ.

How It Works

1. Enter Loan Details

Input your home price, down payment percentage, credit score, interest rate, and loan term.

2. See Your PMI Cost

Get instant calculations for monthly and annual PMI based on your credit score and LTV ratio.

3. Plan PMI Removal

See exactly when you can remove PMI, total cost over time, and how much extra down payment avoids it.

Frequently Asked Questions

Understanding Private Mortgage Insurance (PMI)

Private Mortgage Insurance, commonly known as PMI, is a type of insurance that protects lenders when borrowers make a down payment of less than 20% on a conventional mortgage. While PMI benefits the lender rather than the borrower, understanding how it works is essential for anyone purchasing a home with less than 20% down. Our free PMI calculator helps you estimate your monthly PMI costs, see when you can remove it, and understand how your credit score affects your rate.

How PMI Costs Are Calculated

PMI rates are determined by two primary factors: your loan-to-value (LTV) ratio and your credit score. The LTV ratio is calculated by dividing your loan amount by the home's value - a higher down payment means a lower LTV and typically lower PMI rates. Credit scores play an equally important role, with borrowers having scores of 760 or higher qualifying for the best rates. Someone with excellent credit and 10% down might pay only 0.30% of their loan amount annually, while a borrower with fair credit could pay 0.55% or more for the same down payment.

Strategies to Minimize PMI Costs

If you're facing PMI payments, there are several strategies to minimize or eliminate this cost. First, consider improving your credit score before applying for a mortgage - even a small improvement can significantly reduce your PMI rate. Second, if possible, increase your down payment to lower your LTV ratio. Third, make extra principal payments to reach 80% LTV faster and request early PMI removal. Finally, monitor your home's value - if it has appreciated significantly, you may be able to get a new appraisal and request PMI cancellation based on the higher value.

PMI vs. Other Mortgage Insurance Options

It's important to distinguish PMI from other types of mortgage insurance. FHA loans have their own Mortgage Insurance Premium (MIP) that works differently and cannot be removed as easily as conventional PMI. VA loans for veterans have no mortgage insurance requirement at all, making them an excellent option for eligible borrowers. USDA loans have their own guarantee fee structure. When comparing loan options, factor in the long-term cost of mortgage insurance alongside interest rates and other fees to determine the best overall value for your situation.