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Mortgage Insurance (PMI) Calculator

Enter home price, down payment and PMI rate to estimate your mortgage insurance.

How it is calculated

The loan is loan = home_price − down_payment and the loan-to-value ratio is LTV = loan ÷ home_price × 100. If LTV is above 80%, the annual premium is loan × annual_pmi_rate% and the monthly premium is that figure divided by 12. If LTV is exactly 80% or lower, the tool shows zero PMI, since it applies the common 80% rule. The last result, principal to drop PMI, is loan − 0.8 × home_price: how much of the original loan must be repaid to reach 80% LTV, measured against the original price. The premium is calculated on the starting loan, not on a shrinking balance. The home price must be above zero, the down payment cannot be negative or equal to or above the price, and the rate must be between 0 and 100; otherwise no result is shown. Premium rules and cancellation thresholds differ by country and lender.

Worked example

A 400,000 home with 40,000 down. Loan: 400,000 − 40,000 = $360,000.00. LTV: 360,000 ÷ 400,000 × 100 = 90.00%, which is above 80%, so PMI applies. At a 0.8% annual rate, the yearly premium is 360,000 × 0.8% = $2,880.00, or $240.00 a month. To reach 80% LTV the loan must fall to 320,000, so the principal to drop PMI is 360,000 − 320,000 = $40,000.00.

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Common mistakes

  • Typing the PMI rate as a decimal (0.008) instead of a percent (0.8). The tool expects percent, so 0.008 would give a premium about 100 times too small.
  • Entering the down payment as a percentage. The field takes a money amount, so 10% of a 400,000 home must be typed as 40000.
  • Expecting PMI to fall every month. The premium here is on the original loan and stays flat until LTV reaches 80%; real insurers may price it differently.
  • Treating the last figure as extra money you must pay. It shows how much principal must be repaid, through normal payments or prepayments, before the 80% threshold is reached.
  • Assuming exactly 80% LTV still pays PMI. Here the premium applies only when LTV is above 80%, so a 20% down payment shows $0.00.

About this calculator

Private Mortgage Insurance (PMI) is a monthly premium lenders require on conventional loans when the down payment is below 20 percent, protecting the lender — not you — if you default. It is priced as a percentage of the loan amount per year — commonly 0.5 to 1.5 percent depending on credit score and loan-to-value ratio (LTV) — and split into monthly installments added to your mortgage payment.

LTV, the ratio of loan balance to home value, is the number PMI pricing and cancellation both hinge on: under the U.S. Homeowners Protection Act, lenders must automatically cancel PMI once your LTV reaches 78 percent of the original home value through scheduled payments, and you can typically request cancellation yourself once it hits 80 percent — which is why homeowners track how many more principal payments stand between them and that threshold. Because PMI can add hundreds of dollars a month on a large loan, buyers weigh it directly against the cost of a bigger down payment or a piggyback second mortgage used specifically to avoid it.

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