Updated · Built and checked by the PlinzoTools team, formulas tested against published sources
Estimate your monthly Private Mortgage Insurance (PMI) cost from your loan amount and PMI rate.
Private Mortgage Insurance (PMI) is typically required on conventional loans when your down payment is under 20%. This tool estimates your monthly PMI cost as (loan amount × annual PMI rate) ÷ 12. Actual PMI rates vary by lender, credit score, and loan-to-value ratio (commonly in the 0.3%-1.5% annual range) -- use the rate your lender actually quoted you for an accurate figure.
Enter your loan amount and your annual PMI rate. Your estimated monthly PMI cost appears instantly.
PMI is quoted as an annual percentage of the loan amount, and this calculator converts that into a monthly dollar figure: loan amount multiplied by the annual rate, divided by 12. It does not amortize the loan, so the estimate stays flat rather than falling as you pay down your balance. How a real premium is set and whether it changes over time depends on your loan and policy, so ask your lender how yours is structured.
Monthly PMI = (loan amount x annual rate / 100) / 12
Say you borrow 280,000 dollars and your lender quotes a 0.5 percent annual PMI rate. Annual PMI is 280,000 x 0.005 = 1,400 dollars, which is about 116.67 dollars per month. If the quote were instead 1.0 percent, the cost would double to about 233.33 dollars per month. This shows why a small difference in the quoted rate matters over many years of payments, and why shopping quotes or improving your credit profile before applying can be worthwhile.
Add the monthly PMI estimate to your principal and interest, property taxes, and homeowners insurance to see a realistic monthly housing cost. A house that looks affordable on principal and interest alone can feel tight once PMI is included. Comparing scenarios can help too: run the Mortgage Down Payment Calculator at 10 and 20 percent down, then compare the PMI you would pay in the lower-down scenario with the extra cash you would need to avoid it.
Ask your lender for a loan estimate that itemizes mortgage insurance, and confirm the cancellation rules in your loan documents. A housing counselor can help you compare paths if you are near the threshold.
Typically once your loan balance drops to 78-80% of the home's original value, though the exact rules depend on your loan type and lender -- check your loan agreement or ask your lender directly.
Tax treatment of mortgage insurance premiums has changed over the years, so check current IRS guidance or ask a tax professional rather than assuming it applies to you.
This calculator gives a flat figure based on the loan amount you enter. Whether a real premium changes over time depends on your policy, so ask your servicer how yours works.
PMI protects the lender if you default, while homeowners insurance protects your property and belongings. They are separate costs; see the Homeowners Insurance Calculator for the latter.
A larger down payment is the most common way. Some lenders offer alternatives with different tradeoffs, such as a slightly higher interest rate, so compare full loan estimates.
Reference: Consumer Financial Protection Bureau