PMI Calculator

How to use this PMI calculator

Enter the home price and your down payment, then add the PMI rate your lender quoted, your mortgage interest rate, and the loan term. The calculator works out your loan-to-value (LTV) ratio, estimates the monthly PMI premium, and projects how many months of regular payments it will take to reach 20% equity — the point where you can request PMI removal. If your down payment is already 20% or more, no PMI applies.

How this is calculated

Your loan amount is the home price minus your down payment, and your loan-to-value is that loan divided by the price. Lenders generally require PMI when LTV is above 80%. We estimate monthly PMI as the annual PMI rate times the loan, divided by twelve. To find when PMI ends, we amortize your loan month by month using your interest rate and term, and count the months until the balance falls to 80% of the original home price (20% equity). Total PMI paid is the monthly premium multiplied by that number of months.

Educational estimate, not financial advice — see our disclaimer.

A worked example

Suppose you buy a $400,000 home with a $40,000 down payment. Your loan is $360,000 and your LTV is 90% — above the 80% threshold, so PMI applies. At a 0.5% annual PMI rate, the premium is $360,000 × 0.5% ÷ 12, or roughly $150 a month. With a 6.5% rate over 30 years, your balance reaches $320,000 (80% of the price) after about 8 years of scheduled payments — so you would pay close to $14,000 in PMI before it can be cancelled. Putting down even a little more, or paying extra principal early, shortens that window and cuts the total.

Ways to reduce or avoid PMI

• Put down 20% — the cleanest way to skip PMI entirely from day one.
• Pay extra principal — accelerating payments reaches the 80% LTV mark sooner and shrinks total PMI.
• Request cancellation at 80% — lenders must remove PMI on request once your balance hits 80% of the original value, if you are current on payments.
• Reappraise after improvements — a higher home value can push you below 80% LTV faster than the payment schedule alone.
• Consider a lender-paid option — some loans bundle PMI into a slightly higher rate, though that cost can outlast the equity threshold.

To see the full monthly payment including principal, interest, taxes, and insurance, try our mortgage calculator. To plan how much to save upfront, the down payment calculator shows how each percentage point of down payment changes your loan and PMI.

Common mistakes to avoid

• Confusing PMI with homeowners insurance — PMI protects the lender, not you or your property.
• Forgetting it can be cancelled — many borrowers keep paying PMI long after they qualify to drop it.
• Assuming PMI lasts the whole loan — by law it auto-terminates at 78% LTV on the original schedule.
• Overlooking the rate — PMI rates vary with credit score and down payment, so use your actual quote.