Private mortgage insurance, or PMI, protects the lender — not you — when you put less than 20% down on a conventional home loan. It is a recurring monthly cost that can easily add $100 to $300 to your housing bill, and many homeowners pay it for years without ever seeing a benefit on their side of the deal. This monthly PMI calculator estimates exactly what you will pay each month, how many years that payment will stick around, and the total dollars you hand to the insurer before your equity reaches 20% and the coverage can finally be removed.
The math is simpler than most people expect. PMI is charged as a percentage of your original loan balance, divided into twelve monthly installments. It does not shrink as you pay the loan down. It simply stops — by law or by request — once your loan-to-value ratio (LTV) falls to the cancellation threshold. Slide the inputs below and every figure updates instantly.
How to Use
- Enter the Home Price — the amount you agree to pay the seller.
- Set your Down Payment as a percentage of that price. If you enter 20% or more, the calculator immediately shows $0 for PMI, because lenders do not require coverage at or below an 80% LTV.
- Type your Interest Rate (APR). This matters because the faster your loan amortizes, the faster your balance falls and the sooner PMI cancels.
- Choose the Loan Term — a 15-year loan pays principal down far faster than a 30-year loan, which shortens the PMI period.
- Enter your PMI Rate. Lenders typically quote 0.3% to 1.5% of the original loan amount per year, based on your credit score and down payment size. If you do not know your rate, start at 0.5% as a midpoint.
The result card shows your loan amount, your starting LTV, the monthly principal-and-interest payment, the highlighted Monthly PMI line, how many months you can expect to pay it, the estimated year it drops off, and the total PMI cost over that whole period.
The PMI Formula
Your monthly PMI payment comes from a straightforward calculation:
Monthly PMI = Loan Amount × Annual PMI Rate ÷ 12
Where the loan amount is the home price minus your down payment. Unlike your mortgage principal, the PMI premium is levied on the original loan balance and stays fixed each month — it does not decline as you pay down the loan.
Worked example on a $300,000 home with 5% down at 6.5% for 30 years: the down payment is $15,000, so the loan amount is $285,000. At a 0.5% annual PMI rate, the monthly premium is $285,000 × 0.005 ÷ 12 = $118.75. The loan amortizes down over time; the calculator keeps counting that $118.75 until the remaining balance divided by the home price falls below 80%. On these numbers that happens after about 123 months (roughly 10 years), and the total PMI paid is about $14,606 — almost as much as the original down payment.
When Does PMI Go Away?
Under the federal Homeowners Protection Act, lenders are required to automatically cancel PMI when your loan balance reaches 78% of the original home value. You may also request cancellation yourself once you reach 80% LTV, provided the home has not lost value and you are current on the loan. This calculator uses the 80% requested-cancellation threshold because it is the earliest date most borrowers can stop paying.
Two realities matter here. First, automatic cancellation is based on the original home value, not an inflated appraisal — so rapid appreciation alone is not enough until your balance genuinely amortizes below the threshold. Second, if your home value falls, your LTV rises and PMI can stick around longer than the schedule below suggests. Paying extra toward principal is the fastest way to reach 20% equity sooner and cut this cost off.
Examples
Example 1 — The standard first-time buyer. A couple offers $300,000, puts down 5% ($15,000), locks 6.5% for 30 years, and carries a 0.5% PMI rate. The loan is $285,000, the monthly PMI is $118.75, PMI lasts about 10 years, and the total cost is roughly $14,600 before they can request removal.
Example 2 — A larger down payment saves years. On the same $300,000 home, putting 10% down instead of 5% drops the loan to $270,000. Monthly PMI falls to $112.50, but more importantly the starting LTV is 90% rather than 95%, so the balance reaches the 80% line sooner — meaning fewer months of PMI and a materially lower total bill.
Example 3 — A $1,000,000 home. With 5% down, the loan is $950,000. At 0.5% PMI the monthly premium is about $395.83, and the same ~10-year amortization path means the borrower pays roughly $48,700 in PMI before removal. Running this number before you offer prevents a six-figure surprise on top of your mortgage.
FAQ
How is monthly PMI calculated?
Monthly PMI equals your original loan amount multiplied by the annual PMI rate, then divided by 12. For a $285,000 loan at 0.5% per year, that is $285,000 × 0.005 ÷ 12 = $118.75 per month. The premium is based on the original loan balance and stays fixed, rather than shrinking as you pay the mortgage down.
How much PMI do I pay on a 5% down loan?
On a 5% down conventional loan, your starting LTV is 95%, so PMI is required. The exact monthly amount depends on your quoted rate — commonly 0.3% to 1.5% of the loan per year. On a $285,000 loan at 0.5%, expect about $119 per month; at 1.0%, expect about $238 per month.
When does PMI automatically fall off?
Federal law requires automatic cancellation of PMI when your loan balance reaches 78% of the original home value and you are current on the loan. You can also ask your servicer to cancel it once you reach 80% LTV. The 78% automatic point typically arrives a year or two after the 80% requested point.
Can I remove PMI early without refinancing?
Yes. You can request removal once you reach 20% equity (80% LTV), which you can accelerate by paying extra toward principal. You may also request cancellation after at least five years if your home has appreciated enough that a new appraisal shows 20% equity, though this depends on the lender and the home's value holding up.
Is PMI tax deductible?
PMI payments for qualified residence loans were deductible as itemized mortgage insurance premiums under a provision that has been extended and expired over the years. Eligibility depends on the tax year and your income. Because these rules change frequently, confirm the current treatment with a tax professional before you rely on a deduction.
Does putting 20% down avoid PMI entirely?
Yes. With a 20% down payment your LTV starts at exactly 80%, and conventional lenders do not require private mortgage insurance. That is the main reason the 20% threshold is so widely quoted — it removes this recurring premium from your monthly housing cost for the life of the loan.
Disclaimer
This monthly PMI calculator is provided for informational purposes only and does not constitute financial, lending, insurance, or tax advice. PMI rates, cancellation rules, and timelines vary by lender, loan program, credit profile, and the Homeowners Protection Act. Figures assume the home value is held flat and PMI cancels at an 80% loan-to-value ratio; actual cancellation may occur later or earlier. Always confirm your exact premium and removal date directly with your mortgage servicer.