PMI Calculator

What Is PMI and How Much Does It Cost?

Private mortgage insurance (PMI) is required when your down payment is less than 20% of the home's purchase price. PMI protects the lender — not you — in case of default. Typical PMI costs range from 0.5% to 1.5% of the loan amount annually, paid monthly. On a $300,000 loan, that's $125–$375/month on top of your regular mortgage payment.

The exact rate depends on your credit score, loan-to-value ratio, loan term, and lender. Borrowers with higher credit scores generally pay less PMI.

How to Get Rid of PMI

Under the Homeowners Protection Act, PMI must be automatically cancelled when your loan balance reaches 78% of the original purchase price (based on scheduled amortization). You can request cancellation earlier when you reach 80% LTV — but you may need a new appraisal to prove the current value. Paying extra principal accelerates reaching both milestones.

Frequently Asked Questions

• Can I avoid PMI without 20% down?
  Yes — some options: a piggyback loan (80/10/10 structure), lender-paid PMI (LPMI) where the lender covers PMI in exchange for a slightly higher rate, or VA loans (for eligible veterans) which have no PMI. FHA loans have MIP (mortgage insurance premium) which works differently and is often harder to remove.
• Is PMI tax deductible?
  PMI deductibility has changed over the years and depends on current tax law and income limits. As of recent years, it has been periodically extended but not made permanent. Consult a tax professional for your specific situation.
• How does extra principal payment affect PMI removal?
  Extra payments directly reduce your principal balance, accelerating when you hit 80% LTV. Even $100–$200/month extra can remove PMI 2–4 years earlier on a typical loan, saving thousands in insurance premiums.