PMI Calculator
See how much private mortgage insurance adds to your monthly payment, when it drops off, and whether it makes sense to pay PMI now or save for a larger down payment.
Loan Details
Monthly Costs
How PMI Removal Works #
The Homeowners Protection Act (HPA) of 1998 gives borrowers clear rights regarding PMI cancellation on conventional mortgages. There are two key thresholds every homeowner should know, and they're based on the original purchase price — not your home's current market value.
At 80% loan-to-value (LTV), you can request PMI removal from your lender. To qualify, you must be current on your payments with no 30-day late payments in the past 12 months and no 60-day late payments in the past 24 months. Your lender may also require a property valuation to confirm the home hasn't declined in value and that no subordinate liens exist.
At 78% LTV, your lender is required to automatically cancel PMI — no action needed on your part. This is calculated on the original amortization schedule, meaning extra payments won't automatically accelerate the cancellation date unless you notify your lender. There's also a final safety net: regardless of your LTV, PMI must be terminated at the midpoint of your loan term (month 180 on a 30-year mortgage) as long as you're current on payments.
The gap between the 80% request threshold and the 78% auto-cancel threshold can represent several months of unnecessary PMI payments. Being proactive and requesting removal at 80% can save you hundreds of dollars.
Strategies to Remove PMI Faster #
Make extra principal payments. Even small additional payments accelerate equity growth and can push you past the 80% LTV threshold months or years sooner. Use our Extra Payment Calculator to see how additional payments affect your payoff timeline. Remember to notify your lender once you believe you've reached the 80% mark.
Request a home reappraisal. If your property has appreciated significantly due to market conditions or home improvements, a new appraisal can demonstrate that your current LTV is below 80% — even if your amortization schedule hasn't caught up yet. Expect to pay $300–$500 for a lender-ordered appraisal. Many lenders require at least two years of ownership before they'll consider appraisal-based removal, and the result is not guaranteed — if the appraisal comes in lower than expected, you're out the fee.
Refinance to a new loan. If you've built enough equity through appreciation or payments, refinancing into a new conventional loan at or below 80% LTV eliminates PMI entirely. You'll also get a fresh rate, which could lower your payment further if rates have dropped. Use our Refinance Calculator to determine whether the closing costs make sense given your timeline. This approach works best when you have at least 20% equity and plan to stay in the home long enough to recoup refinancing costs.
Frequently Asked Questions #
What is PMI and why do I have to pay it?
Private Mortgage Insurance (PMI) protects your lender — not you — if you default on the loan. It's required on conventional mortgages when your down payment is less than 20% of the home price. PMI typically costs 0.5% to 1.5% of the loan amount per year, added to your monthly payment. The higher your loan-to-value ratio and the lower your credit score, the more you'll pay.
How much does PMI cost per month?
PMI typically ranges from 0.5% to 1.5% of your loan amount annually, divided into monthly payments. On a $360,000 loan at 0.85% PMI rate, that's $255 per month. Your actual rate depends on your credit score, down payment percentage, loan type, and lender. Borrowers with credit scores above 760 and down payments of 15% or more usually get the lowest rates.
When does PMI go away?
Under the Homeowners Protection Act (HPA), your lender must automatically cancel PMI when your loan balance reaches 78% of the original purchase price based on the amortization schedule. You can request removal earlier once you reach 80% loan-to-value, but you must have a good payment history — no 30-day late payments in the past year and no 60-day lates in the past two years.
Can I cancel PMI early?
Yes, you can request PMI cancellation once your loan-to-value ratio reaches 80% — either through regular payments or by proving your home's value has increased. If your home has appreciated, you can request a new appraisal (typically $300–$500) to demonstrate the higher value. Some lenders require at least two years of ownership before accepting an appraisal-based removal request.
Is it better to pay PMI or wait until I have 20% down?
It depends on your local market, how long you'll pay PMI, and the opportunity cost of waiting. If home prices are rising 5% per year, delaying your purchase to save more could cost you more than the PMI itself. However, if you can reach 20% within a year or two, waiting eliminates PMI entirely and gives you a lower monthly payment and better equity position from day one.