PMI Cost Calculator
Calculate your monthly and annual Private Mortgage Insurance (PMI) cost and when you can request cancellation.
How to use this tool
- Enter loan amount, pmi rate, current home value and monthly principal paydown in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your monthly pmi cost and the full breakdown beneath it.
PMI protects the lender when your down payment is less than 20%. Under the Homeowners Protection Act, you can request PMI cancellation once your equity reaches 20% (80% LTV).
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Monthly PMI = Loan Amount × (PMI Rate % ÷ 100) ÷ 12
Annual PMI = Monthly PMI × 12
Current LTV = (Loan Amount ÷ Home Value) × 100
Months to Cancel = ⌈(Loan Balance − 80% × Home Value) ÷ Monthly Principal Paydown⌉
How it works
This calculator uses the annual PMI rate (a percentage of the loan amount) to derive monthly and annual costs, then determines the current loan-to-value ratio and estimates how many months of principal payments are needed to reach the 80% LTV threshold at which PMI can be cancelled under the Homeowners Protection Act.
PMI rates vary by lender, loan type, credit score, and down payment size, typically ranging from 0.2% to 2% annually. This tool uses a straight-line paydown model; actual amortization means each payment pays slightly more principal over time, so the true cancellation date may arrive slightly sooner.
Worked example
- Monthly PMI = $240,000 × (0.85% ÷ 100) ÷ 12 = $170.00
- Annual PMI = $170.00 × 12 = $2,040
- Current LTV = ($240,000 ÷ $300,000) × 100 = 80.0%
- LTV is already at 80%, so PMI cancellation threshold is already met
Monthly PMI: $170.00 | Annual PMI: $2,040 | Current LTV: 80% | Months to PMI cancellation: 0
Common mistakes to avoid
- Assuming PMI cancels automatically at 80% LTV; lenders only auto-cancel at 78% based on the original amortization schedule, not current market value.
- Using the original purchase price instead of the current appraised value when estimating LTV, missing the possibility of requesting early cancellation after significant appreciation.
- Ignoring lender-paid PMI (LPMI) as an alternative; with LPMI the rate is baked into a higher interest rate, which cannot be canceled the way borrower-paid PMI can.
Key terms
- Private Mortgage Insurance (PMI)
- Insurance required by lenders when the down payment is less than 20%, protecting the lender if the borrower defaults; the cost is borne by the borrower.
- Loan-to-Value (LTV) ratio
- The mortgage balance divided by the appraised home value, expressed as a percentage; PMI is typically required when LTV exceeds 80%.
- PMI rate
- The annual cost of PMI expressed as a percentage of the outstanding loan balance, typically 0.2%–2% depending on credit and loan type.
- Homeowners Protection Act (HPA)
- U.S. federal law requiring lenders to cancel PMI automatically when the LTV reaches 78% and allowing borrower-requested cancellation at 80% LTV.
- Monthly principal paydown
- The portion of each mortgage payment that reduces the outstanding loan balance, distinct from the interest portion.
Frequently asked questions
- How do I cancel PMI?
- Under US law (Homeowners Protection Act), you can request PMI cancellation in writing once your loan-to-value ratio reaches 80% based on original value. It auto-cancels at 78% LTV. You may need a new appraisal if relying on appreciation.
- How much does PMI cost?
- PMI typically costs 0.5–1.5% of the loan amount per year, paid monthly. The rate depends on your credit score, down payment size, and loan type. A larger down payment or higher credit score means lower PMI.