PMI Calculator - How Much Does Private Mortgage Insurance Cost?
PMI Calculator
PMI Payment Schedule:
| Item | Monthly | Total |
|---|---|---|
| Mortgage Payment | ||
| PMI | ||
| Property Tax | ||
| Home Insurance | ||
| HOA Fee | ||
| Other Costs | ||
| Total Out-of-Pocket | With PMI: After PMI: |
PMI Payment Table
| Month | Date | Principal | Interest | LTV Ratio | Ending Balance | PMI | Out-of-Pocket |
|---|
| Year | Date | Principal | Interest | Ending Balance | PMI |
|---|
Payment Visualization
How Does This PMI Calculator Work?
Our PMI calculator uses industry-standard formulas to estimate your private mortgage insurance costs:
- Credit Score Method: Select your credit score range to automatically apply the corresponding PMI rate (0.46% - 1.5% annually)
- Custom Amount Method: Enter your specific PMI rate or dollar amount if you have a quote from your lender
- LTV Calculation: The calculator tracks your loan-to-value ratio to determine when PMI can be removed (at 80% or 78% LTV)
- Complete Breakdown: View month-by-month and year-by-year payment schedules including PMI costs
Key Metrics Explained
- PMI Rate: The annual percentage of your loan amount charged for PMI
- Monthly PMI: Your monthly PMI payment amount
- Number of Months Paying PMI: How long you'll pay PMI before reaching your LTV threshold
- Total PMI: The cumulative amount you'll pay in PMI over the entire period
- Loan-to-Value Ratio: Your current loan balance divided by the home value, expressed as a percentage
The calculator shows your complete housing costs:
- Principal and Interest (P&I)
- Private Mortgage Insurance (PMI)
- Property Taxes
- Homeowners Insurance
- HOA Fees (if applicable)
- Other Costs
What PMI Rates Can I Expect Based on My Credit Score?
PMI rates vary significantly based on your credit score. Here's a typical breakdown:
| Credit Score Range | Annual PMI Rate | Monthly Cost (on $450,000 loan) |
|---|---|---|
| 760+ | 0.46% | $172.50/month |
| 740-759 | 0.58% | $217.50/month |
| 720-739 | 0.70% | $262.50/month |
| 700-719 | 0.79% | $296.25/month |
| 680-699 | 0.98% | $367.50/month |
| 660-679 | 1.23% | $461.25/month |
| 640-659 | 1.31% | $491.25/month |
| 620-639 | 1.50% | $562.50/month |
How To Calculate PMI (Private Mortgage Insurance)?
PMI is calculated by dividing the annual PMI cost by 12 to get the monthly payment, and it continues until your loan-to-value (LTV) ratio drops to 80% or below.
Step 1: Determine if PMI is Required
Down Payment Percentage = (Down Payment ÷ Home Price) × 100 PMI Required if: Down Payment < 20%
Step 2: Calculate Monthly PMI Payment
Monthly PMI = Annual PMI Cost ÷ 12
Step 3: Calculate When PMI Ends
Current LTV = (Remaining Loan Balance ÷ Home Price) × 100 PMI stops when: LTV ≤ 80%
Step 4: Calculate Monthly Mortgage Payment (P&I)
Monthly Payment = [P × r × (1 + r)^n] ÷ [(1 + r)^n - 1] Where: P = Principal (Loan Amount) r = Monthly Interest Rate (Annual Rate ÷ 12 ÷ 100) n = Total Number of Payments (Years × 12)
Step 5: Track Principal Balance Each Month
Interest Payment = Remaining Balance × Monthly Interest Rate Principal Payment = Monthly Payment - Interest Payment New Balance = Remaining Balance - Principal Payment
Given Data:
- Home Price: $500,000
- Down Payment: $50,000 (10%)
- Annual Interest Rate: 6%
- Loan Term: 15 years
- Annual PMI: $1,000
1. Down Payment Check
Down Payment % = ($50,000 ÷ $500,000) × 100 = 10%
Since 10% < 20% → PMI is REQUIRED ✓
2. Loan Amount
Loan Amount = $500,000 - $50,000 = $450,000
3. Monthly PMI
Monthly PMI = $1,000 ÷ 12 = $83.33
4. Monthly Mortgage Payment (P&I)
P = $450,000
r = 6% ÷ 12 ÷ 100 = 0.005
n = 15 × 12 = 180 months
Monthly P&I = [$450,000 × 0.005 × (1.005)^180] ÷ [(1.005)^180 - 1]
= $3,797.365. Total Monthly Payment (with PMI)
Total Payment = $3,797.36 + $83.33 = $3,880.69
6. When Does PMI Stop?
| Month | Principal Payment | Remaining Balance | LTV | PMI Status |
|---|---|---|---|---|
| 1 | $1,547.36 | $448,452.64 | 89.69% | Active |
| 2 | $1,555.09 | $446,897.55 | 89.38% | Active |
| ... | ... | ... | ... | ... |
| 30 | $1,788.16 | $400,051.33 | 80.01% | Active |
| 31 | $1,797.10 | $398,254.23 | 79.65% | STOPS ✓ |
7. Total PMI Paid
Total PMI = $83.33 × 30 = $2,500.00
| Item | Value |
|---|---|
| Monthly P&I Payment | $3,797.36 |
| Monthly PMI | $83.33 |
| Total with PMI (months 1-30) | $3,880.69 |
| PMI Duration | 30 months |
| Total PMI Paid | $2,500.00 |
| Payment after PMI ends | $3,797.36 |
You will pay $83.33/month PMI for 30 months, totaling $2,500.00. After month 30, your monthly payment drops from $3,880.69 to $3,797.36 (savings of $83.33/month).
What Is the Difference Between PMI and FHA Mortgage Insurance?
It's important to distinguish between conventional PMI and FHA mortgage insurance:
| Feature | Conventional PMI | FHA Mortgage Insurance |
|---|---|---|
| Cancellation | Removable at 78-80% LTV | Permanent (if down payment < 10%) |
| Upfront Cost | None | 1.75% of loan amount |
| Monthly Cost | 0.46% - 1.5% annually | 0.55% - 0.85% annually |
| Credit Requirements | Higher (typically 620+) | Lower (typically 580+) |
FAQ
How Can I Avoid PMI?
Avoid PMI by making a 20% down payment, using a piggyback loan, or qualifying for VA/USDA loans that don't require PMI.
When Can You Remove PMI?
You can remove PMI when your loan-to-value ratio reaches 80% (by request) or it's automatically cancelled at 78%.
What Are Tips for Reducing PMI Costs?
Reduce PMI costs by improving your credit score, making extra principal payments to reach 80% LTV faster, and shopping multiple lenders for the best rates.
Is PMI Tax Deductible?
PMI tax deductibility has changed over time and depends on current tax laws and your income level. As of 2024, the PMI deduction is not available unless extended by Congress. Consult with a tax professional for current guidance.
Can I Avoid PMI With Less Than 20% Down?
Yes, through alternative loan structures like VA loans (for eligible veterans), USDA loans (for eligible rural properties), or piggyback loans (80-10-10 structure).
Does PMI Protect Me as the Homeowner?
No, PMI protects the lender, not you. It covers the lender's risk if you default on the loan. You should maintain separate homeowners insurance to protect your investment.
How Long Do Most People Pay PMI?
On average, homeowners pay PMI for 7-11 years, depending on their down payment size, home price appreciation, and extra principal payments. Use our calculator to see your specific timeline.
Can I Refinance to Remove PMI?
Yes, if your home has appreciated enough to reach 80% LTV or if you've paid down enough principal, you can refinance into a new loan without PMI. However, consider closing costs and whether the new interest rate is favorable.
What Happens if Home Values Decrease?
If home values decline, it may take longer to reach the 80% LTV threshold for PMI removal. The removal is typically based on the original property value, not current market value, unless you refinance.
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