PMI Calculator (Private Mortgage Insurance)
Private Mortgage Insurance calculator. Computes monthly + lifetime PMI cost when down payment is below 20%. Shows the HOPA-mandated auto-cancellation month at 78% LTV plus the 80% request-cancellation threshold.
PMI Calculator
| Loan amount | — |
| LTV at origination | — |
| Down payment % | — |
| Annual PMI cost | — |
| Auto-cancel month (78% LTV) | — |
| Request-cancel month (80% LTV) | — |
| Extra down to skip PMI entirely | — |
How to use the PMI calculator
Enter home price + down payment
Total home purchase price and your cash down at closing. PMI is triggered when down payment is less than 20% of price — i.e. loan-to-value (LTV) above 80%. If you put down exactly 20% or more, no PMI required. Below that, you pay PMI until the loan amortizes down (or you refinance / re-appraise) to 78% LTV.
Enter mortgage rate + term
Use the rate and term on your quote — a 30-year fixed is the most common US structure. The mortgage rate matters for PMI because it determines how fast your principal amortizes — higher rate = slower principal paydown = longer PMI period. 15-year loans eliminate PMI faster purely because principal pays down 2-3× faster.
Enter PMI rate (% of loan annually)
Freddie Mac estimates PMI at USD 30–70 a month per USD 100,000 borrowed — roughly 0.35–0.85% of the loan per year. Where you land depends on (a) credit score — higher scores pay less, (b) LTV — 95% LTV pays more than 85% LTV, (c) loan type. Ask your lender for the actual quote; it comes off the rate card of the insurer they use (MGIC, Enact, Radian, Essent, Arch or National MI).
Read monthly + lifetime PMI cost
Three headlines: (1) Monthly PMI — added to your P&I + tax + insurance. A $370K loan @ 0.6% PMI = $185/month. (2) Total PMI until cancellation — what you'll pay before HOPA auto-cancels it. (3) Auto-cancel timing — when scheduled amortization brings LTV to 78% of original home value. On the default inputs (USD 400,000 price, USD 30,000 down, 7%, 30 years) that is month 130 — about 11 years; a bigger down payment or lower rate brings it forward.
Use the analysis to decide your down payment
The PMI table also shows extra down payment needed to avoid PMI entirely (i.e. to get to 20% down). For many borrowers, the break-even calculation is: is the $10-20K extra down worth saving $150-300/month in PMI? Usually yes if you have the cash — PMI is "money down the drain" since it protects the lender, not you. But low-down-payment programs (FHA, VA, USDA) can still make sense for first-time buyers who otherwise couldn't save the 20%.
PMI — the insurance that protects the lender, not you
Private Mortgage Insurance (PMI) is an insurance policy that protects the lender from default loss on a high-LTV mortgage. When your down payment is less than 20% — meaning the lender is on the hook for more than 80% of the home's value — they require you to pay for an insurance policy that reimburses them if you default. The policy reimburses the bank, not you. PMI is the single most-misunderstood line item on a US mortgage statement: many first-time buyers think they're paying for their own protection. They aren't. Freddie Mac estimates PMI at USD 30–70 a month per USD 100,000 borrowed — roughly 0.35–0.85% of the loan a year, paid monthly as part of the mortgage payment. For a $370K loan at 0.6% PMI, that's $185/month, and on the default inputs above it runs for about 11 years before cancelling.
How HOPA changed the rules
Before the Homeowners Protection Act of 1998 (HOPA), borrowers could be stuck paying PMI for the entire life of their loan even after their LTV dropped well below 80%. Lenders had no obligation to cancel. HOPA (12 U.S.C. 4901–4910, applying to loans closed on or after 29 July 1999) changed that: (1) Automatic termination on the date the balance is first scheduled to reach 78% of the original value under the initial amortization schedule, provided you are current — no request required, no appraisal needed. (2) Borrower-requested cancellation once the balance reaches 80% of original value, by schedule or by actual payments — you must ask in writing, have a good payment history, and the lender may require evidence that the value has not fallen. (3) Final termination the month after the midpoint of the amortization period, regardless of LTV, if you are current — a failsafe for declining-value scenarios. (4) Disclosure requirements — lenders must tell you at closing when PMI is scheduled to terminate.
PMI doesn't protect you. It protects the lender from your default. The borrower-paid premium is calculated from your loan terms but disbursed to the bank if anything goes wrong. Knowing this changes how you should think about minimising it.
Should you put 20% down to avoid PMI?
The classic question. Three factors. (1) The PMI cost. $150-400/month for typical loan sizes — annualised, that's $1,800-$4,800/year of pure cost. (2) The opportunity cost of extra down. If you have $20K cash and could put it down to skip PMI, you give up the investment return on that $20K. If your alternative investment returns 8% after-tax and PMI costs you ~3% (185/month on $74K extra down = 3%), invest the cash. If your alternative is a 4% high-yield savings, save the PMI. (3) Home appreciation. If your home's value rises, you can re-appraise after a year or two and ask the servicer to cancel PMI when LTV drops to 80% via appreciation rather than amortization — this is servicer policy, not a HOPA right, so ask what evidence they accept. Speeds the cancellation timeline. Many savvy buyers plan to put 5-10% down, pay PMI for 2-3 years, then re-appraise to drop it.
FHA vs Conventional vs VA
FHA loans use a different insurance: MIP (Mortgage Insurance Premium), not PMI. MIP has two parts: an upfront premium (1.75% of the loan, usually financed into it), plus annual premiums of 0.15–0.75% since HUD's March 2023 cut (Mortgagee Letter 2023-05). For loans endorsed since June 2013 with <10% down, MIP lasts the entire life of the loan — it does NOT cancel like PMI. Many borrowers refinance from FHA to conventional once LTV drops below 80%, specifically to escape lifetime MIP. VA loans (eligible veterans) have NO mortgage insurance — instead, a one-time funding fee at closing. USDA loans (rural areas) have a similar lifetime guarantee fee. Conventional with PMI wins long-term because PMI eventually cancels; FHA wins short-term because requirements are easier and rates are slightly lower.
Automatic at 78%, on request at 80%, and gone by the midpoint whatever the value
PMI protects the lender, not you. The most-misunderstood part of US mortgages. Default on the loan, insurance pays the bank, you still lose the house.
Triggered at LTV > 80%. Below 20% down = PMI required. Above = no PMI. Sharp threshold at the 20% line.
PMI cost: about USD 30–70 a month per USD 100,000 borrowed (Freddie Mac) — roughly 0.35–0.85% a year. Credit score and LTV are the drivers.
HOPA 1998 (12 U.S.C. 4902) terminates PMI automatically when the balance is first scheduled to reach 78% of original value — if you are current. No request, no appraisal.
You can request PMI cancellation at 80% LTV — but the lender may require a current appraisal at your expense.
Re-appraisal can accelerate cancellation if home value has risen. Many savvy buyers re-appraise after 2-3 years to drop PMI early.
FHA loans use MIP, not PMI. For loans endorsed since June 2013, MIP lasts the ENTIRE life of the loan if down payment is <10%. Refinance to escape.
Six private insurers write US PMI: MGIC, Enact (formerly Genworth), Radian, Essent, Arch, National MI. The lender picks; you don't.
Lender-paid PMI (LPMI) is an alternative where the lender pays the premium in exchange for a higher mortgage rate. It never cancels — the rate is for life.
VA + USDA loans have no PMI — replaced by upfront funding fees. Big advantage for eligible borrowers.
Frequently asked questions
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Several ways. (1) VA loan if you're an eligible veteran — zero PMI, often zero down. (2) USDA loan in qualifying rural areas — no PMI, just an annual guarantee fee. (3) "Piggyback" 80-10-10 loan: first mortgage at 80% LTV (no PMI), second mortgage / HELOC at 10%, 10% down. Less common post-2008 but still available. (4) Lender-paid PMI (LPMI) — lender pays PMI in exchange for a higher rate. LPMI can't be cancelled, so it's worse long-term but better short-term cash flow. (5) Credit union or community-lender programs sometimes offer no-PMI low-down conventional loans.
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For automatic cancellation, no. HOPA auto-cancellation is based on the original amortization schedule, not your actual balance — extra payments don't accelerate the auto-cancel date. For requested cancellation at 80% LTV, yes. When you actually reach 80% LTV via extra payments + scheduled amortization, you can request cancellation (lender may require appraisal). For aggressive prepayers, this can shave years off PMI. Also: a new appraisal showing home appreciation has pushed LTV below 80% can trigger cancellation regardless of payment history.
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It lapsed and has come back. PMI was deductible (subject to income limits) through tax year 2021 via repeated extender legislation and was not available for 2022–2025; the One Big Beautiful Bill Act of July 2025 restores the deduction of mortgage insurance premiums as home mortgage interest for tax years beginning after 2025. Mortgage interest itself remains deductible on up to $750K of acquisition debt, a limit the same Act made permanent. Check the current-year IRS Publication 936 — and note the deduction only helps if you itemize, which most households do not since the 2018 standard-deduction increase.
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All three mean "mortgage insurance" but differ by loan type. PMI (Private Mortgage Insurance) = conventional loans only. Issued by private insurers (MGIC, Genworth, etc.). Cancellable per HOPA. MIP (Mortgage Insurance Premium) = FHA loans only. Issued by the FHA. NOT cancellable for post-2013 loans with <10% down — lasts the life of the loan. MI is a generic abbreviation that could mean either. Lenders often use "MI" in disclosures because most paperwork is loan-agnostic. The important distinction is FHA MIP vs Conventional PMI — the cancellation rules are dramatically different.
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Three triggers under HOPA. (1) Auto-cancel at 78% LTV per original amortization (typically year 8-13 on a 30-yr loan). (2) Borrower request at 80% LTV (typically year 6-11). (3) Loan midpoint failsafe — at half the original loan term (year 15 on a 30-yr, year 7.5 on a 15-yr), regardless of LTV. This catches scenarios where home values have collapsed and the borrower still owes more than the home is worth (negative equity) but their PMI is still being charged. Any borrower currently paying PMI past the midpoint of their loan term should call their servicer immediately — they may be entitled to a refund of overpaid PMI.
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Three actions. (1) Boost your credit score. Insurer rate cards step down at each score band, so moving up a band before you apply lowers the premium. Pay down credit-card balances, dispute errors, age accounts. (2) Increase down payment. Each 5% down-payment bracket (5%, 10%, 15%) qualifies for materially lower PMI. (3) Shop lenders. Different lenders use different PMI providers (MGIC, Enact, Radian, Essent, Arch, National MI) and get different rates on the same loan. Get several lender quotes — it costs nothing. For FHA: there's no lender choice (MIP is government-set), so the only lever is loan type — refinance to conventional once equity allows.
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Generally no, but two scenarios trigger refunds. (1) Servicer error — if your servicer continues charging PMI past the auto-cancellation date, they owe you a refund of all PMI paid since the cancellation date. This actually happens — request your amortization schedule and check the cancellation date. (2) Lender-paid PMI (LPMI) refinance — if you refinance out of LPMI, you don't get a refund (it was baked into the rate), but the rate drops. FHA upfront MIP refund — possible if you refinance FHA-to-FHA within 36 months, on a sliding scale. Borrower-paid monthly PMI on conventional loans is generally not refundable.
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It walks the standard amortization schedule month-by-month from the entered loan, rate, and term. At each month, it checks whether the scheduled balance has dropped below 80% of original home value (request-cancel threshold) and 78% (auto-cancel threshold). The first month each threshold is crossed is reported. This matches HOPA's definition of "based on the original amortization schedule" — exactly what your servicer uses for the auto-cancel decision. Real-world variation: home-value re-appraisals can accelerate the 80%-threshold cancellation but require borrower action and lender approval.
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No. Home price, down payment, rate, PMI rate — everything stays in your browser. The calculation runs as client-side JavaScript: amortization walk to find LTV thresholds, monthly + lifetime PMI totals. Open DevTools → Network when you click Calculate and you'll see zero outbound requests. Safe for confidential financial planning.
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HOPA (Homeowners Protection Act) — 12 USC 4901-4910, the source legislation. CFPB (consumerfinance.gov) — plain-English guide to PMI rules. Freddie Mac's My Home PMI calculator and cost estimate. Insurer rate cards (MGIC, Enact, Radian, Essent, Arch, National MI) show how credit score, LTV and loan type drive the premium. HUD Handbook 4000.1 and Mortgagee Letter 2023-05 for FHA MIP rules (different from PMI). For comprehensive treatment: Brueggeman & Fisher's "Real Estate Finance and Investments" chapter on mortgage insurance.
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Method & sources
How it computes
Annual PMI = loan × PMI rate; monthly = ÷12. Walks the scheduled amortisation of the loan (level payment at the entered rate and term) to find the first month the scheduled balance is ≤ 80% of original value (borrower-requested cancellation) and ≤ 78% (automatic termination), capping the automatic month at the loan midpoint; total PMI = monthly × months to automatic termination. No PMI if LTV at origination ≤ 80%.
What this tool implements
- Homeowners Protection Act 1998, 12 U.S.C. 4901–4902: cancellation at 80% and automatic termination at 78% of ORIGINAL value on the initial amortisation schedule; final termination the month after the midpoint of the amortisation period
- Original value = purchase price (statute: lesser of sales price or appraised value); borrower assumed current with a good payment history
- PMI cost range quoted from Freddie Mac (USD 30–70 per month per USD 100,000 borrowed ≈ 0.35–0.85%/yr); actual premium comes from the insurer's rate card
- FHA MIP described separately: 1.75% upfront, 0.15–0.75% annual since March 2023 (Mortgagee Letter 2023-05), life-of-loan for < 10% down
Sources
- law.cornell.edu
- law.cornell.edu
- myhome.freddiemac.com — mortgage insurance
- U.S. Department of Housing and Urban Development. Mortgagee Letter 2023-05, Reduction of Annual Mortgage Insurance Premium Rates; 22 February 2023.
What can make this go out of date
- FHA annual MIP schedule (HUD Mortgagee Letters; last changed March 2023) — prose only
- IRS treatment of mortgage-insurance premiums (Pub 936; restored for tax years after 2025 by the July 2025 Act) — prose only
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