PMI Calculator

The PMI calculator determines your monthly private mortgage insurance cost and projects when you will reach enough equity to have it removed, saving you money for the remainder of your loan term. Private mortgage insurance is required by lenders when your down payment is less than 20 percent of the home price. It protects the lender (not you) against loss if you default on the loan. The cost is expressed as an annual percentage of the original loan amount. The basic calculation multiplies your loan amount by the annual PMI rate, then divides by 12 to get the monthly cost. For example, a $315,000 loan (90 percent of a $350,000 home) with a 0.75 percent PMI rate costs $2,362.50 per year, or about $197 per month. PMI rates are not one-size-fits-all. They vary based on your loan-to-value ratio, credit score, loan type, and coverage level. Borrowers with higher credit scores and larger down payments get lower PMI rates. Typical rates range from 0.3 percent for a borrower with excellent credit and 15 percent down, up to 1.5 percent or more for a borrower with a lower credit score and just 3 percent down. The calculator also projects your PMI removal date. Under the Homeowners Protection Act, you can request PMI cancellation once your loan balance reaches 80 percent of the original purchase price. Your lender must automatically terminate PMI when the balance falls to 78 percent. The calculator uses your amortization schedule to find the exact month when each threshold is reached. Additionally, the calculator shows your total PMI cost from the start of the loan until the removal date, and how much your monthly payment drops once PMI is eliminated. This helps you evaluate whether making a larger down payment to avoid PMI entirely is worth the extra upfront cash.