PMI Calculator
Estimate your monthly and annual Private Mortgage Insurance (PMI) payments based on your home purchase price, down payment, and expected annual PMI rate.
Calculation Results
The primary mortgage amount borrowed.
The percentage of the home price financed by the mortgage.
Estimated monthly premium added to your payment if LTV is 80% or higher.
Total estimated mortgage insurance cost per year.
How This Calculator Works
To calculate your estimated PMI payment:
- Enter the home purchase price.
- Enter the amount you plan to pay as a down payment.
- Provide the annual PMI rate (typically between 0.3% and 1.5% depending on your credit score and down payment size).
The calculator evaluates your LTV ratio and determines if PMI is required, displaying the estimated premium.
Formula & Calculations
The loan-to-value (LTV) ratio is calculated as follows:
LTV = (Loan Amount / Home Price) × 100
Where Loan Amount = Home Price - Down Payment.
Conventional lenders typically require Private Mortgage Insurance (PMI) if your LTV ratio is 80% or greater (meaning your down payment is less than 20%). If LTV is less than 80%, PMI is $0.
If PMI is required, the monthly premium is calculated by multiplying the loan amount by the annual PMI rate and dividing by 12:
Monthly PMI = Loan Amount × (Annual PMI Rate / 100) / 12
Annual PMI = Monthly PMI × 12
Step-by-Step Calculation Examples
10% Down Purchase Example
Buying a $350,000 home with a 10% down payment ($35,000) at an average annual PMI rate of 0.7%.
- home_price: 350000
- down_payment: 35000
- pmi_rate: 0.7
- loan_amount: $315,000.00
- ltv: 90.00%
- monthly_pmi: $183.75
- annual_pmi: $2,205.00
Frequently Asked Questions
When can I cancel or remove conventional PMI?
By federal law, you can request that conventional PMI be canceled once your mortgage balance reaches 80% of the original purchase price of the home, provided you have a good payment history. The lender must automatically terminate PMI when the loan-to-value reaches 78%.
How is the annual PMI rate determined?
Your annual PMI rate depends on two main factors: your credit score and your down payment percentage. Higher credit scores and larger down payments (closer to 20%) result in lower annual PMI rates.
Do FHA loans have PMI?
FHA loans do not use conventional PMI. Instead, they require a Mortgage Insurance Premium (MIP), which includes both an upfront premium (1.75% of the loan amount) and an annual premium (typically 0.55% to 0.85%). Unlike conventional PMI, FHA MIP usually cannot be removed and lasts for the life of the loan.