PMI Calculator

What is PMI? Use a mortgage insurance calculator

A PMI calculator estimates the cost of private mortgage insurance on a home loan. PMI is insurance that protects the lender if you stop making payments. It does not insure your home or repay you for a loss.

Lenders may require PMI when a borrower makes a smaller down payment. The calculator estimates your monthly premium from the loan amount and annual PMI rate. It also uses your mortgage rate and term to estimate when your balance may reach the stated 78% loan-to-value cancellation point.

Why PMI matters

PMI adds to your monthly housing cost without reducing your principal. Knowing the estimated premium can help you compare homes, decide how much to put down, and check whether a payment fits your budget before you make an offer.

The projected end date can help you plan for a future change in your housing costs. Treat it as an estimate, not a promise: your loan documents and servicer determine how cancellation works for your loan. Because PMI rules and loan documents vary, confirm the cancellation timing and costs with your mortgage servicer or a qualified mortgage professional.

How to use this PMI calculator

1. Enter the home price. The calculator uses this value to estimate the starting loan-to-value ratio.
2. Enter your down payment. The estimated loan amount is the home price minus the down payment.
3. Enter the annual PMI rate as a percentage. If you do not know it, ask your lender for an estimate rather than treating a guess as a quote.
4. Enter your mortgage interest rate and loan term. These help estimate how quickly your balance falls toward the cancellation point.
5. Review the monthly PMI estimate, loan-to-value ratio, projected cancellation timing, and estimated total PMI paid. Compare the estimate with your lender’s disclosures and loan documents.

PMI calculator example

How to read your PMI results

Loan-to-value, or LTV, compares the loan amount with the home’s value. A higher starting LTV means you are borrowing a larger share of the home price. In the example, the $20,000 down payment leaves an estimated $380,000 loan, which is 95% of the $400,000 price.

Monthly PMI is an estimate based on the loan amount and the annual PMI rate you entered. Your actual premium may differ from the estimate your lender or insurer provides. The cancellation date and total PMI paid are projections based on the entered mortgage rate and term and the calculator’s 78% threshold. They are not a substitute for your servicer’s cancellation notice or loan terms.

How to reduce PMI costs

1. 01

   Compare a larger down payment with keeping cash available

   A larger down payment can reduce the amount borrowed and may reduce PMI. Before committing extra savings to the purchase, compare the lower estimated housing cost with the cash you would have left for repairs, moving costs, and other bills.

2. 02

   Compare homes and loan offers

   Try different home prices and down payments in the calculator to see how they affect the estimate. Ask lenders for written loan and PMI estimates, then compare the full monthly payment and borrowing costs rather than choosing by PMI alone.

3. 03

   Ask about the cancellation process

   Ask your servicer how it determines eligibility, what steps you must take, and whether it needs documentation or an appraisal. Keep track of your balance and follow the process in your loan documents instead of relying only on the calculator’s projected date.

4. 04

   Review refinancing carefully

   If your home value or loan balance changes, ask a lender whether refinancing could change your mortgage insurance cost. Compare the new rate, fees, and payment with the cost of keeping your current loan before deciding.

Common PMI calculator mistakes

• Entering the wrong PMI rate

  The annual PMI rate is not the same as your mortgage interest rate. Use a PMI estimate from your lender for the insurance rate, and enter your mortgage rate separately.

• Treating the estimate as a lender quote

  The result depends on the inputs you provide. Your actual premium and cancellation terms can differ, so check your loan disclosure and ask your servicer to confirm.

• Assuming every mortgage uses PMI

  This calculator estimates private mortgage insurance. Other loan programs may use different mortgage insurance terms. Confirm which type applies to your loan before relying on the result.

• Planning around the date without checking your loan terms

  The projected date is an estimate based on the entered rate, term, and cancellation threshold. Your servicer can explain the specific requirements and process for your loan.

The PMI formula

Key terms

PMI

Private mortgage insurance. It protects the lender against certain losses if the borrower does not repay the mortgage.

Loan-to-value ratio

The loan amount compared with the home’s value, expressed as a percentage.

Amortization

The process of paying down a loan balance through scheduled payments over its term.

Automatic cancellation point

The balance threshold used by this calculator to estimate when PMI ends automatically: 78% loan-to-value.