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PMI Calculator
Calculate your monthly Private Mortgage Insurance (PMI) cost based on your loan amount, down payment, and PMI rate. Understand how PMI affects your monthly mortgage payments and when you can expect to have it removed.
PMI Cost Calculator
Enter your loan details below to calculate your estimated monthly PMI payment.
Understanding Pmi: A Complete Guide
The pmi is one of the most significant financial decisions most Americans will make in their lifetime. With the median home price in the United States exceeding $400,000 and mortgage terms spanning 15 to 30 years, understanding every aspect of your mortgage is critical to long-term financial health.
This Pmi Calculator Calculator provides detailed analysis of your mortgage scenario, helping you understand monthly payments, total interest costs, and the true cost of homeownership. Whether you are a first-time homebuyer exploring affordability or a current homeowner considering refinancing, this tool gives you the data you need to make confident decisions.
Mortgage rates are influenced by a complex interplay of factors including Federal Reserve policy, inflation expectations, the bond market, your credit score, down payment amount, and loan type. Even a small difference in your mortgage rate — as little as 0.25% — can translate to tens of thousands of dollars over the life of a 30-year loan.
Understanding how principal and interest payments are allocated over time, how prepayments can accelerate your payoff timeline, and when refinancing makes financial sense are all essential aspects of mortgage literacy that this calculator helps illuminate.
How to Use This Pmi Calculator
- Enter your Loan Amount ($) — This value represents your loan amount
- Enter your Down Payment ($) — This value represents your down payment
- Enter your PMI Rate (%) Annual — This value represents your pmi rate (%) annual
- Click Calculate — Review your results in the output section below the form. The calculator instantly computes all values based on your inputs.
- Adjust and Compare — Modify any input to see how changes affect the result. Try different scenarios to find the optimal approach for your situation.
All calculations are performed instantly in your browser. Your data is never sent to any server or stored anywhere — your financial information remains completely private.
Formula and Methodology: Private Mortgage Insurance (PMI) Formula
Annual PMI = Loan Amount × PMI Rate
PMI Rate typically ranges from 0.3% to 1.5% based on LTV and credit score
Where:
- Loan Amount — The mortgage principal balance
- PMI Rate — Annual PMI percentage (varies by credit score, LTV ratio, and loan type)
- LTV — Loan-to-Value ratio = Loan Amount / Home Value
Worked Example
Home price: $350,000. Down payment: 10% ($35,000). Loan: $315,000. Credit score: 720. LTV: 90%. PMI rate: 0.55%. Annual PMI = $315,000 × 0.0055 = $1,732.50. Monthly PMI = $144.38. PMI drops off when LTV reaches 78% (loan balance = $273,000).
Limitations and Assumptions
PMI is required on conventional loans with less than 20% down payment. It protects the lender, not you. PMI automatically terminates when LTV reaches 78% based on the original amortization schedule. You can request cancellation at 80% LTV. Alternatives to PMI include VA loans (no PMI), lender-paid MI (higher rate), and piggyback loans (80/10/10 structure).
Key Concepts and Definitions
Understanding the following key concepts will help you interpret your results and make better financial decisions:
- Principal — The initial amount of money involved in the calculation, whether it is a starting balance, loan amount, or investment.
- Interest Rate — The percentage charged or earned on the principal amount, typically expressed as an annual rate (APR). This rate determines how quickly your money grows or how much borrowing costs.
- Compounding — The process of earning interest on previously earned interest. More frequent compounding (daily vs. monthly vs. annually) results in higher effective returns or costs.
- Time Horizon — The length of time over which the calculation applies. Longer time horizons amplify the effects of compounding and small differences in rates.
- Present Value vs. Future Value — Present value is what money is worth today; future value is what it will be worth at a specific point in the future, accounting for growth or inflation.
These concepts form the foundation of virtually all financial calculations. Understanding how they interact helps you evaluate any financial product or decision with confidence.
Real-World Example: Putting the Pmi to Work
Let's walk through a practical home-buying scenario.
Scenario: The Martinez family is looking to buy a $350,000 home. They have $70,000 saved for a down payment (20%) and have been pre-approved at 6.75% for a 30-year fixed mortgage.
- Loan amount: $280,000
- Monthly P&I payment: $1,816
- Monthly property tax (est.): $292
- Monthly insurance: $125
- Total monthly housing cost: $2,233
- Total interest over 30 years: $373,760
By putting 20% down, the Martinez family avoids PMI (private mortgage insurance), saving approximately $117 per month. Over the first five years, they will pay approximately $88,000 in interest and only $21,000 in principal — a common surprise for new homeowners.
If they make one extra monthly payment per year ($1,816), they would pay off the mortgage in approximately 25 years and save over $62,000 in total interest. This calculator helps visualize these powerful long-term impacts.
Scenario Comparison: PMI Cost by Down Payment and Credit Score
Estimated monthly PMI on a $350,000 home at different down payment and credit score levels.
| Down Payment | LTV | Credit 760+ | Credit 700 | Credit 660 |
|---|---|---|---|---|
| 3% ($10,500) | 97% | $135/mo | $195/mo | $275/mo |
| 5% ($17,500) | 95% | $105/mo | $160/mo | $235/mo |
| 10% ($35,000) | 90% | $70/mo | $115/mo | $175/mo |
| 15% ($52,500) | 85% | $40/mo | $70/mo | $115/mo |
| 20% ($70,000) | 80% | No PMI | No PMI | No PMI |
