Use this calculator to estimate your monthly PMI (Private Mortgage Insurance), your full estimated monthly payment, and when you may reach 80% loan-to-value (LTV).
What is PMI?
PMI stands for Private Mortgage Insurance. Lenders usually require it when a conventional loan has a down payment below 20%. PMI protects the lender—not the borrower—if the borrower defaults.
In plain language: if you put less money down, you are seen as higher risk, and PMI is the extra cost attached to that risk.
How PMI is typically calculated
Most lenders apply an annual PMI percentage to your loan amount. That annual figure is then divided by 12 for a monthly charge.
Simple PMI formula
Monthly PMI = (Loan Amount × Annual PMI Rate) ÷ 12
Example: A $360,000 loan with a 0.55% PMI rate:
- Annual PMI = $360,000 × 0.0055 = $1,980
- Monthly PMI = $1,980 ÷ 12 = $165
What affects your PMI rate?
PMI rates vary by borrower and loan profile. These factors usually matter most:
- Loan-to-value (LTV): Higher LTV generally means higher PMI.
- Credit score: Better credit often lowers PMI cost.
- Loan type and term: Program details can change pricing.
- Occupancy: Primary residence vs. second home/investment property.
When does PMI go away?
For many conventional loans, PMI can be removed once your balance reaches 80% of the home’s original value (by request), and must usually be automatically terminated around 78% if payments are current.
This calculator estimates when that 80% LTV point may occur based on your loan terms and standard amortization.
How to reduce or avoid PMI
1) Put 20% down
The cleanest way to avoid PMI on a conventional mortgage is to start at 80% LTV or below.
2) Improve your credit profile before applying
Better credit can reduce both your mortgage interest rate and PMI rate.
3) Refinance later
If your home value rises or you pay down principal, refinancing can remove PMI and potentially lower your payment.
4) Make extra principal payments
Extra payments can move you to 80% LTV faster, reducing the time you pay PMI.
PMI vs. MIP: quick distinction
PMI is used for many conventional loans. FHA loans use MIP (Mortgage Insurance Premium), which has different rules and can last longer depending on your down payment and loan age.
Final takeaway
PMI is not always “bad”—it can help you buy sooner with less cash upfront. But it is a real monthly cost, so understanding the numbers helps you choose the best path.
Use the calculator above to model scenarios quickly. Try changing your down payment, PMI rate, and interest rate to see how your monthly costs and PMI timeline shift.