Mortgage PMI Cost Calculator: Annual Private Mortgage Insurance
Work out the annual cost of private mortgage insurance (PMI) — the premium added to your monthly mortgage payment when you put less than 20% down on a conventional loan.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Annual PMI cost | Loan amount (unchanged) |
|---|---|---|
| 0.5% of $400k | 2,000 | 398,000 |
| 0.8% of $250k | 2,000 | 248,000 |
| 1.2% of $300k (lower credit) | 3,600 | 296,400 |
| 0.35% of $600k (high credit) | 2,100 | 597,900 |
How This Calculator Works
Enter the loan amount and the PMI rate quoted by the lender. The calculator multiplies the two to give the annual PMI cost. Divide by 12 to get the monthly PMI premium that adds to the mortgage payment.
The Formula
Percentage of an Amount
Amount is the base value, Percentage is the rate applied to it
Worked Example
A $400,000 loan with a 0.5% PMI rate costs $2,000 a year — about $167 a month — on top of principal, interest, taxes, and insurance. Across the years until you reach 22% equity (when PMI legally must be cancelled), that adds up to roughly $12,000 to $18,000 of insurance protecting the lender, not the homeowner.
Key Insight
PMI is the cost of buying a home with less than 20% down. It is removable: lenders must cancel PMI at 78% LTV based on original purchase price, and borrowers can request cancellation at 80% LTV based on current market value with an appraisal. Tracking the home's value and asking for cancellation as soon as eligible can save thousands over the life of the loan.
PMI vs FHA MIP — the cancellation difference
Two main mortgage insurance structures in U.S. loans. PMI (Private Mortgage Insurance) on conventional loans: cancellable. Typically required when LTV >80%; automatically removed when LTV drops below 78% based on original property value; can be requested at 80% LTV based on current appraised value. For most borrowers, PMI lasts 5-12 years before automatic removal.
FHA MIP (Mortgage Insurance Premium): typically lifetime. For FHA loans with <10% down: MIP continues for the entire loan life. For FHA loans with ≥10% down: MIP for 11 years. For most FHA borrowers, MIP becomes a substantial lifetime cost — often $50K-$80K over a 30-year loan vs $10K-$25K for cancellable PMI on conventional.
This is the structural disadvantage of FHA — lifetime MIP for most borrowers. Many borrowers refinance from FHA to conventional once they reach 80% LTV to escape MIP. The refinance costs ($3K-$8K) typically pay back within 2-3 years just from MIP savings. For borrowers whose only loan option is FHA (low credit, low down), the lifetime MIP is acceptable cost; for borrowers who could qualify for conventional, FHA is rarely the best long-term choice.
PMI rate determination — credit score and LTV interact
PMI rates depend primarily on two factors: credit score and LTV. Approximate 2024 rate matrix for borrower with 760+ credit: 95% LTV = 0.55%; 90% LTV = 0.40%; 85% LTV = 0.32%. For borrower with 680 credit: 95% LTV = 1.05%; 90% LTV = 0.85%; 85% LTV = 0.65%. The 3-4× rate variance from 760 to 680 credit makes credit score the single most important factor in PMI cost.
On $400K loan: 760 credit at 95% LTV = $2,200/year PMI; 680 credit at 95% LTV = $4,200/year PMI. The $2,000/year difference compounds to ~$15K-$25K over typical 7-10 year PMI period — a meaningful financial cost of lower credit score even after qualifying for the same loan.
Strategies to reduce PMI: (1) Improve credit score before application (each 20-point credit score improvement typically lowers PMI rate by 0.05-0.15 percentage points); (2) Use Lender-Paid Mortgage Insurance (LPMI) — lender absorbs PMI in exchange for higher rate; cheaper over short hold periods if you'll refinance or move within 7 years; (3) Use piggyback financing (80/10/10) — first mortgage at 80% LTV (no PMI), second mortgage at 10%, 10% down. Common in 2007 pre-crisis era; less popular post-crisis due to credit risk.
U.S. PMI rates by credit score and LTV (2024 approximate)
Reference monthly PMI rates by credit score and LTV. Rates expressed as annual percentage of loan amount.
| LTV | 760+ credit | 720-759 | 680-719 | 640-679 |
|---|---|---|---|---|
| 97% | 0.65% | 0.85% | 1.20% | 1.50% |
| 95% | 0.55% | 0.70% | 1.00% | 1.30% |
| 90% | 0.40% | 0.55% | 0.80% | 1.05% |
| 85% | 0.32% | 0.45% | 0.65% | 0.85% |
| 80% and below | 0% (no PMI required) |
Rates approximate. Actual PMI quotes vary by PMI provider (MGIC, Genworth, Radian, Essent, Arch, National MI), loan purpose (purchase vs refinance), occupancy (primary vs second home), and property type (single family vs condo). For specific quotes, lender provides 3-4 PMI provider quotes; borrower selects lowest. Excellent credit borrowers can also negotiate LPMI structures that may be cheaper for short-hold scenarios.
Frequently Asked Questions
How is PMI calculated?
Multiply the loan amount by the annual PMI rate. A $400,000 loan at 0.5% PMI is $2,000 a year — about $167 a month. The rate depends on credit score, LTV, and loan program.
When is PMI required?
On conventional loans with LTV above 80% (less than 20% down). FHA loans use mortgage insurance premiums (MIP) instead, which have different rules. VA loans have no monthly mortgage insurance.
Can PMI be cancelled?
Yes. Lenders must automatically cancel at 78% LTV based on original purchase price. Borrowers can request cancellation at 80% LTV based on current value with an appraisal — useful in rising markets.
Is PMI tax deductible?
It was through 2021 with income limits, but the deduction expired at the federal level. Some states still allow it. Check current US tax rules — they change.
Is lender-paid PMI better than borrower-paid?
Depends. Lender-paid PMI rolls the cost into a slightly higher interest rate — cheaper upfront, more expensive over the long term. Borrower-paid PMI shows as a separate line but is cancellable; lender-paid is not.
When is this calculator unreliable?
When not accounting for PMI cancellation timing — PMI is temporary and ends when LTV drops below 78% (automatic) or 80% (by borrower request). For honest total cost, model the expected number of years PMI applies based on principal pay-down schedule and any expected appreciation. Also unreliable when comparing PMI cost to FHA MIP without considering MIP's lifetime nature for most FHA borrowers.
References & Authoritative Sources
- Consumer Financial Protection Bureau (CFPB) — Mortgage Insurance Disclosure Requirements · consulted June 1, 2026 · Federal regulator guidance on PMI
- U.S. Department of Justice — Homeowners Protection Act — Homeowners Protection Act of 1998 · consulted June 1, 2026 · Federal law governing PMI termination
- Mortgage Bankers Association (MBA) — Annual Mortgage Insurance Statistics · consulted June 1, 2026 · Industry data on U.S. PMI rates and trends
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Data Sources & Benchmarks
This calculator draws on 1 independent, dated source.
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Methodology & Review
Mortgage PMI cost equals loan amount × PMI rate. The calculator returns annual and monthly PMI cost. U.S. PMI rates 2024: 0.3-1.5% annually depending on credit score, LTV, and PMI provider. Higher credit score = lower PMI; higher LTV = higher PMI. PMI typically required on conventional loans with <20% down (LTV > 80%) and continues until LTV drops below 78% based on original property value. Borrower can request removal at 80% LTV based on current appraised value (useful in appreciating markets). RELIABILITY: Reliable as a direct PMI cost calculation. Less reliable for total PMI cost over the loan period because PMI removes when LTV drops below 78% — timing depends on principal pay-down and any property appreciation. PMI is a 'temporary' cost for most borrowers, typically lasting 5-12 years before automatic removal.
Reviewed according to the CalcDomain Editorial Policy & Calculator Methodology. We document formulas, edge cases, sources, update dates, and correction paths for calculator pages.
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