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.

Calculators

Free Refinancers PMI Calculator (2026)

Refinance to eliminate PMI and lower your monthly payment

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Why Refinancers Matters

If your home has appreciated since purchase, refinancing can eliminate PMI by resetting your loan-to-value ratio above the 20% equity threshold. Our calculator helps you determine whether refinancing to remove PMI makes financial sense by comparing the cost of the refinance (closing costs, potential rate changes) against the ongoing PMI savings. Model different scenarios including rate-and-term refinancing, cash-out refinancing, and conventional-to-conventional refinancing to find the optimal strategy for your situation.

Best For

Homeowners with homes that have appreciated significantly

Borrowers currently paying PMI who want to reduce monthly costs

Real estate agents advising clients on refinancing opportunities

Tips & Best Practices

Calculate your break-even point — divide the total refinancing costs by the monthly PMI savings to determine how many months until you recoup the expense

Get your home appraised before committing to a refinance to confirm your equity position supports PMI removal at the new LTV

If interest rates have also dropped since your original purchase, refinancing can deliver a double benefit — eliminating PMI and reducing your interest rate simultaneously

Consider whether you plan to sell within the next few years — if your break-even point is 3 years but you plan to sell in 2, refinancing to remove PMI may not make financial sense

Frequently Asked Questions

How much equity do I need to refinance and remove PMI?

You need at least 20% equity (80% LTV or lower) in your home based on the new appraised value to refinance into a conventional loan without PMI. Some lenders may require 25% equity for investment properties. The equity can come from principal payments, home improvements, or market appreciation since your purchase.

How much does it cost to refinance to remove PMI?

Refinancing closing costs typically range from 2-5% of the loan amount, or $4,000-$10,000 on a $200,000 loan. This includes appraisal fees, title insurance, origination fees, and other lender charges. Compare this one-time cost against your ongoing PMI savings to determine if refinancing makes financial sense for your timeline.

Can I remove PMI without refinancing?

Yes, you can request PMI cancellation from your current lender when your loan balance reaches 80% of the original purchase price. If your home has appreciated, you can request a new appraisal to demonstrate 20% equity based on current value. Your lender may charge for the appraisal but this is much cheaper than a full refinance.

More PMI Calculator Use Cases

First-Time Buyers Low Down Payment

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