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PMI Calculator

Enter the loan amount and annual PMI rate to find the monthly and annual PMI cost.

How it is calculated

The estimate is a flat percentage of the loan: annual PMI = loan_amount × pmi_rate ÷ 100 and monthly PMI = annual PMI ÷ 12. The loan amount is the amount borrowed (not the home price) in dollars, and the rate is the annual premium in percent, for example 0.8 for 0.8% a year. The tool uses the loan amount you type as a fixed base, so it does not model the balance shrinking as you repay, nor the point at which the insurance can be cancelled. Premium rates depend on the insurer, your credit score and your down payment, so use the quote from your lender. A rate of zero is accepted and gives zero. A loan amount of zero or less, a negative rate or a rate above 100 gives no result.

Worked example

Take a loan of $320,000 and a quoted PMI rate of 0.8% per year. Step 1: annual premium = 320,000 × 0.8 ÷ 100 = $2,560.00. Step 2: monthly premium = 2,560 ÷ 12 = $213.33. That $213.33 is added on top of principal and interest each month while the insurance applies. Over five years of unchanged premium that would come to roughly $12,800 in total, which is why asking when PMI can be dropped matters.

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Common mistakes

  • Typing the rate as a decimal fraction (0.008) instead of a percent (0.8). The result then comes out one hundred times too small.
  • Entering the home price instead of the loan amount. PMI is charged on what you borrow, so subtract your down payment first.
  • Treating the monthly figure as permanent. The premium is only paid until the insurance is cancelled or ends, and the tool does not show when that happens.
  • Entering a monthly rate instead of the annual one. The tool already divides by 12.
  • Forgetting that PMI is separate from principal, interest, property tax and homeowners insurance, so the figure is only one part of the monthly housing payment.

About this calculator

Private mortgage insurance (PMI) is typically required by conventional lenders when a homebuyer puts down less than 20% of the purchase price, protecting the lender — not the borrower — against loss if the loan defaults. The premium is usually expressed as an annual rate applied to the loan balance and then divided into twelve monthly payments added on top of principal and interest.

In the United States, the Homeowners Protection Act generally allows borrowers to request cancellation once the loan balance drops to 80% of the original home value, and requires automatic termination at 78%, so PMI is usually a temporary cost rather than a permanent one — but it can add a meaningful amount to the monthly payment in the meantime.

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