A PMI calculator shows you exactly what private mortgage insurance will cost you every month, and roughly how long you'll be paying it before it automatically disappears from your bill. If you're putting down less than 20% on a home, PMI is one of the most overlooked line items in a mortgage payment, and this free tool puts a real number on it in seconds.
At Arb Digital, we work with lenders and real estate clients who field this question constantly from first-time buyers: "how much is PMI actually going to cost me, and when does it go away?" We built this calculator to give a straight, honest answer without a loan officer needing to run the numbers for you first.
What This PMI Calculator Does
This PMI calculator estimates your monthly and annual private mortgage insurance cost based on your home price, down payment, and the PMI rate quoted by your lender or insurer. It also estimates your current loan-to-value ratio, projects roughly how many months it will take of ordinary principal paydown before your balance reaches 80% of the original home value β the point at which PMI typically becomes eligible for removal β and totals up the estimated PMI you'll pay along the way.
PMI is not the same as homeowners insurance. It protects the lender, not you, in case you default on the loan. It's required on most conventional loans whenever the down payment is below 20%, and the rate you're charged depends on your credit score, loan type, and down payment size.
How to Use It
- Enter the home price. Use the purchase price if you're buying, or the current value if you're checking an existing mortgage.
- Enter your down payment. The dollar amount you're putting down, or already put down, at closing.
- Enter the PMI annual rate. Lenders typically quote this as a percentage of the loan amount, commonly between 0.3% and 1.5% depending on credit score and LTV. Use your lender's quote if you have one.
- Enter your mortgage interest rate and term. These are used only to estimate how quickly your loan balance shrinks through normal amortization, which drives the PMI removal timeline.
- Click Calculate. You'll see your monthly PMI cost, your annual cost, your current LTV, an estimated number of months until automatic removal, and total estimated PMI paid over that period.
The Formula / How It's Calculated
The loan amount is simply the home price minus your down payment: Loan = Price β Down Payment. Your loan-to-value ratio is the loan divided by the home price: LTV = Loan Γ· Price. Whenever that ratio is above 80%, PMI typically applies. The monthly PMI premium is calculated as: Monthly PMI = Loan Γ (PMI Annual Rate Γ· 12). Using our default example β a $400,000 home with a $40,000 down payment and a 0.5% PMI rate β the loan is $360,000, the LTV is 90%, and the monthly PMI comes out to $150.
To estimate when PMI drops off, the calculator runs a standard mortgage amortization using your entered interest rate and term, tracking how the loan balance shrinks month by month as you make normal principal-and-interest payments. It stops at the first month where the remaining balance falls to 80% or less of the original home value β not the current value β since that's the benchmark used for PMI cancellation under federal law. For the official rules on PMI cancellation and automatic termination, see the Consumer Financial Protection Bureau's guide to private mortgage insurance.
Automatic Termination vs. Borrower-Requested Cancellation
Under the federal Homeowners Protection Act, your lender must automatically cancel PMI once your loan balance is scheduled to reach 78% of the original value of the home, as long as you're current on payments. That's an automatic right β you don't have to ask for it, though it's still smart to track the date yourself, since servicer errors happen.
You also have the right to request cancellation earlier, once your balance reaches 80% of the original value, but this route usually requires you to submit a written request, be current on payments, have a good payment history, and in some cases pay for a new appraisal to confirm the home hasn't lost value. If your home has appreciated significantly since purchase, some lenders will also let you cancel PMI early based on a new appraisal showing your current LTV is already below 80%, even if you haven't paid down the loan balance that far β it's worth asking your servicer directly about this option.
How PMI Rates Are Actually Priced
PMI is not a flat fee β insurers price it based on risk, and several factors move the rate up or down. A higher LTV (a smaller down payment) generally means a higher PMI rate, since the lender's exposure is greater. Credit score matters just as much: borrowers with scores above 760 often pay noticeably less than borrowers in the 620β680 range for an identical loan. Loan type plays a role too β adjustable-rate mortgages sometimes carry higher PMI than fixed-rate loans because of the added rate risk. Some lenders also offer "single-premium" PMI, paid entirely at closing instead of monthly, or "lender-paid" PMI, which is built into a slightly higher interest rate instead of a separate monthly line item. Each structure has trade-offs worth comparing against the standard monthly PMI shown by this calculator.
Ways to Avoid or Shorten PMI Beyond Just Paying It
Waiting out PMI isn't the only path. A "piggyback" loan structure β sometimes called an 80-10-10 β splits your financing into a first mortgage at 80% LTV, a second mortgage or HELOC for another 10%, and a 10% down payment, avoiding PMI entirely because the primary loan never crosses the 80% threshold. This can save money if the combined rate on both loans is cheaper than paying PMI, though it adds a second monthly payment and its own closing costs, so it's worth running both scenarios side by side rather than assuming it's automatically better.
Some buyers instead choose lender-paid PMI, where the mortgage insurance cost is folded into a slightly higher interest rate rather than billed as a separate monthly charge. This can lower your stated monthly payment, but because it's baked into the rate, it doesn't go away once you cross 80% LTV the way standard borrower-paid PMI does β you'd need to refinance to remove it. Making extra principal payments early in the loan is often the simplest lever: even an extra $100 to $200 a month toward principal in the first few years can pull your PMI removal date forward by a year or more, which the calculator above will reflect if you re-run it with a shorter effective term or a larger notional payment.
Finally, if home values in your area have risen meaningfully since you bought, a fresh appraisal showing your current LTV below 80% may qualify you for early removal without waiting for scheduled amortization to get you there β even if your loan balance technically hasn't dropped much. It typically costs a few hundred dollars for the appraisal, but if it shaves a year or more off monthly PMI payments, it usually pays for itself quickly.
Run any loan amount and property value through our LTV calculator to double-check your ratio. Arb Digital also builds fast, high-converting websites and content for lenders and financial services brands β see all of our free tools below.
Try the LTV Calculator All Free ToolsPMI on Refinances, Not Just Purchases
PMI isn't limited to home purchases. If you refinance and your new loan balance ends up above 80% of the home's current appraised value β whether because you're rolling closing costs into the loan, taking cash out, or the home hasn't appreciated as much as expected β the new lender will typically require PMI again, even if your original purchase loan didn't have it or had already shed it. This is a detail worth checking carefully before signing refinance paperwork, since it can quietly add a monthly cost that offsets some or all of the savings from a lower interest rate. Our mortgage refinance calculator can help you see the full new payment picture, PMI included, before you commit.
Common Mistakes to Avoid
- Assuming PMI cancels automatically without you tracking it. Servicer errors happen β mark your calendar for the 78% and 80% milestones and follow up in writing.
- Confusing PMI with homeowners insurance. PMI protects the lender if you default; it does not protect your home or belongings.
- Ignoring extra principal payments. Even small additional payments toward principal can shave months or years off your PMI timeline.
- Not comparing PMI structures. Single-premium, split-premium, and lender-paid PMI can sometimes save money over standard monthly PMI depending on how long you plan to keep the loan.
- Forgetting FHA loans work differently. FHA mortgage insurance premiums follow separate federal rules and often can't be cancelled the same way conventional PMI can β sometimes only refinancing removes it.
Related Free Tools From Arb Digital
Keep planning with the LTV Calculator to check any loan-to-value ratio, the Mortgage Calculator for your full monthly payment, the House Affordability Calculator to see what you can comfortably buy, and the HELOC Calculator or Home Equity Loan Calculator once you've built equity. Browse our full free online tools hub for more.
Frequently Asked Questions
PMI usually runs between 0.3% and 1.5% of the loan amount per year, depending on your credit score, down payment, and loan type. Use the calculator above with your lender's actual quote for a precise figure.
Federal law requires automatic cancellation once your loan balance is scheduled to reach 78% of the original home value, as long as you're current on your payments.
Yes, you can typically request cancellation once your balance reaches 80% of the original value, or sometimes earlier with a new appraisal showing sufficient appreciation.
On most conventional loans, yes β a down payment of 20% or more generally means PMI isn't required at all, since the LTV starts at 80% or below.
Deductibility of mortgage insurance premiums has changed periodically in past tax law and isn't guaranteed for any given year. Check current IRS guidance or ask a tax professional before assuming a deduction applies.
Yes. PMI applies to conventional loans and can usually be cancelled once equity thresholds are met. FHA loans carry their own mortgage insurance premium with different, often stricter, cancellation rules.
This tool provides general estimates for educational purposes only and is not financial, tax, legal, or medical advice. Figures are illustrative; consult a licensed professional for decisions.
