Private Mortgage Insurance (PMI) is insurance that protects the lender — not you — if you default on the loan. It is required on conventional loans when your down payment is less than 20% of the home purchase price.

How much does PMI cost?

PMI typically costs between 0.2% and 2% of the loan amount per year, depending on your credit score, loan-to-value ratio, and lender. A borrower with a $300,000 loan at 0.5% PMI rate would pay $1,500 per year or $125 per month.

When can I remove PMI?

Under the Homeowners Protection Act, lenders must automatically cancel PMI when your loan balance reaches 78% of the original purchase price. You can request cancellation earlier once your balance drops to 80% of the original value, provided you have a good payment history.

Is PMI tax-deductible?

PMI deductibility has varied by tax year and income limits. Consult a tax professional for your specific situation, as this changes with federal tax law.

Does PMI protect me as a borrower?

No. PMI protects the lender against loss if you default. It provides no direct benefit to you as the borrower, which is why eliminating it as soon as eligible is generally advisable.

Can I avoid PMI without 20% down?

Some lenders offer "piggyback" loans (80/10/10 structure) or lender-paid PMI (LPMI) options that avoid traditional PMI, though LPMI typically results in a higher interest rate. FHA loans have their own mortgage insurance premiums (MIP) that work differently.

PMI Calculator

Enter your home price, down payment, and PMI rate to see your monthly PMI cost and when you can cancel it.

Loan Details

Home Price ($)

Down Payment

Amount ($)

Percent (%)

Annual PMI Rate (%) Typical range: 0.2% – 2.0%

Loan Term (years)

Annual Interest Rate (%)

Monthly PMI

—

Annual PMI

—

Loan Amount

—

Loan-to-Value

—

PMI Removal Timeline

Can request cancellation (80% LTV) —

Automatic cancellation (78% LTV) —

Total PMI payments (request date) —

Months paying PMI —

Current Equity Progress

0% equity 20% target

Estimates assume fixed-rate monthly payments with no extra principal. Actual PMI removal date may vary by lender policy. PMI cancellation requires written request and may require a home appraisal confirming current value.

Summary

Private Mortgage Insurance (PMI) is required by most lenders when your down payment is less than 20% of the home price. This calculator shows your exact monthly and annual PMI cost based on your loan amount and PMI rate. It also projects the date your loan balance will drop to 80% of the original home value so you know exactly when you can request PMI cancellation.

How it works

Enter the home purchase price.
Enter your down payment amount or percentage.
Enter the annual PMI rate (typically 0.2%–2% of the loan amount).
Optionally adjust the loan term and interest rate for an accurate payoff timeline.
The calculator shows monthly PMI, annual PMI, and the projected PMI removal date.

Use cases

Estimate total monthly housing cost including PMI before buying.
Compare scenarios with different down payment amounts to see PMI savings.
Find out exactly when you can request PMI cancellation to reduce payments.
Evaluate whether a larger down payment is worth it to avoid PMI entirely.
Plan extra principal payments to reach 20% equity sooner.
Understand PMI impact when refinancing with low equity.

Frequently Asked Questions

Last updated: 2026-10-05 · Reviewed by Nham Vu