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.
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.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 1 independent, dated source.
Methodology & Review
PMI is the loan amount multiplied by the annual PMI rate. Rates typically range from 0.3% to 1.5% of the loan, depending on credit score, LTV, and loan type. The calculator models the annual cost; divide by 12 for the monthly PMI premium added to the mortgage payment.
Written by Ugo Candido · Last updated May 17, 2026.