Private mortgage insurance (PMI) is required on conventional loans with a down payment below 20%. It costs 0.5%–1.5% of your loan balance per year — adding $83–$250 per month on a $200,000 loan. Use the tables and formulas below to calculate your estimated PMI cost and learn how to eliminate it as fast as possible.
PMI Cost Calculator — Formula
$$\text{Monthly PMI} = \frac{\text{Loan Amount} \times \text{PMI Rate}}{12}$$
Example: $350,000 loan at 1.0% PMI rate:
$$\frac{$350{,}000 \times 0.01}{12} = $291.67 \text{ per month}$$
PMI Rate by Down Payment and Credit Score
PMI rate (annual, as % of loan) varies by how much you put down and your credit score:
| Credit Score | 5% Down | 10% Down | 15% Down |
|---|---|---|---|
| 760+ | 0.50% | 0.35% | 0.25% |
| 720–759 | 0.75% | 0.55% | 0.40% |
| 680–719 | 1.00% | 0.75% | 0.55% |
| 640–679 | 1.35% | 1.00% | 0.80% |
| 620–639 | 1.50% | 1.20% | 1.00% |
Lower down payment + lower credit score = highest PMI rates.
Monthly PMI Estimate by Home Price
Monthly PMI at 1.0% Annual Rate (Common for 10% Down, Good Credit)
| Home Price | Down Payment (10%) | Loan Amount | Monthly PMI |
|---|---|---|---|
| $200,000 | $20,000 | $180,000 | $150 |
| $300,000 | $30,000 | $270,000 | $225 |
| $350,000 | $35,000 | $315,000 | $263 |
| $400,000 | $40,000 | $360,000 | $300 |
| $500,000 | $50,000 | $450,000 | $375 |
| $600,000 | $60,000 | $540,000 | $450 |
Monthly PMI at 0.5% Annual Rate (Common for 15%+ Down, Excellent Credit)
| Home Price | Down Payment (15%) | Loan Amount | Monthly PMI |
|---|---|---|---|
| $300,000 | $45,000 | $255,000 | $106 |
| $400,000 | $60,000 | $340,000 | $142 |
| $500,000 | $75,000 | $425,000 | $177 |
Total PMI Cost Until Cancellation
PMI continues until your loan-to-value (LTV) ratio reaches 80%. Here’s how long that takes at 10% down:
| Home Price | Monthly PMI (1%) | Months Until 80% LTV (30-yr, 7% rate) | Total PMI Paid |
|---|---|---|---|
| $250,000 | $188 | ~96 months (8 years) | ~$18,000 |
| $350,000 | $263 | ~96 months (8 years) | ~$25,200 |
| $500,000 | $375 | ~96 months (8 years) | ~$36,000 |
At 7% on a 30-year loan with 10% down, you don’t reach 80% LTV through payments alone until about year 8. Home appreciation can shorten this significantly.
How to Calculate Your Loan-to-Value (LTV) Ratio
$$\text{LTV} = \frac{\text{Loan Balance}}{\text{Home Value}} \times 100$$
Example: $280,000 remaining balance on a home worth $370,000:
$$\text{LTV} = \frac{$280{,}000}{$370{,}000} \times 100 = 75.7%$$
At 75.7% LTV, you are below the 80% threshold and can request PMI cancellation.
How to Cancel or Avoid PMI
Cancellation (For Existing Borrowers)
- Request cancellation at 80% LTV. Under the Homeowners Protection Act (HPA), you have the right to request PMI removal when your principal balance reaches 80% of the original purchase price based on your original amortization schedule.
- Automatic cancellation at 78% LTV. Lenders must automatically terminate PMI when the balance drops to 78% of the original value — even without a request.
- New appraisal for appreciation. If your home has appreciated significantly, order a new appraisal. If the new LTV is below 80%, request cancellation — your lender may require the loan to be at least 2 years old.
- Refinance. If rates have improved, refinancing at 80%+ equity eliminates PMI entirely while potentially lowering your rate.
Avoiding PMI From the Start
- Put 20%+ down — eliminates PMI entirely on conventional loans
- Piggyback loan (80-10-10) — take an 80% first mortgage, 10% second mortgage, and 10% down. No PMI on the first loan, but the second loan carries a higher rate
- Lender-paid PMI (LPMI) — lender pays PMI in exchange for a higher rate. No separate PMI fee, but the higher rate lasts the life of the loan
- VA loan — available to eligible veterans/service members; no PMI, no down payment required
- USDA loan — no PMI for eligible rural properties (annual guarantee fee applies instead)
PMI vs. FHA Mortgage Insurance Premium (MIP)
FHA loans require MIP regardless of down payment — and it typically cannot be removed:
| Feature | PMI (Conventional) | MIP (FHA) |
|---|---|---|
| Required when | LTV > 80% | All FHA loans |
| Upfront cost | None | 1.75% of loan |
| Annual rate | 0.5%–1.5% | 0.55% (30-yr, 10%+ down) / 0.85% |
| Cancellation | Yes, at 80% LTV | Only by refinancing (if < 10% down) |
If your credit score is 680+, a conventional loan with PMI is often cheaper long-term than an FHA loan with MIP.
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