PMI Calculator

How PMI Works and When It's Required

Private mortgage insurance (PMI) is a type of insurance that conventional mortgage lenders require when a borrower makes a down payment of less than 20% of the home's purchase price. PMI protects the lender — not the borrower — against financial loss if the borrower defaults on the loan. According to the Consumer Financial Protection Bureau (cfpb.gov), PMI is triggered by the loan-to-value (LTV) ratio: when your loan amount exceeds 80% of the home's appraised value, PMI is required.

PMI is typically paid as a monthly premium added to your mortgage payment, though some lenders offer single-premium or lender-paid options. The cost ranges from 0.2% to 2% of the loan amount per year, depending on your credit score, down payment size, and loan type. For a $360,000 loan, that translates to $60 to $600 per month. The Homeowners Protection Act of 1998 requires lenders to automatically cancel PMI when your loan balance reaches 78% of the original purchase price, and borrowers can request cancellation at 80% LTV with a good payment history.

PMI Rates by Credit Score in 2026

Your credit score is the single biggest factor in determining your PMI rate. Higher scores signal lower default risk, which translates directly to lower PMI premiums. Based on 2026 rate cards from major PMI providers including MGIC and Genworth, here are the typical annual PMI rates for a conventional 30-year fixed loan with 10% down:

• 760+ credit score: 0.25%–0.35% annually — the lowest tier, saving hundreds per year compared to lower scores.
• 740–759: 0.35%–0.45% annually — still excellent rates with minimal PMI impact on monthly payments.
• 720–739: 0.45%–0.65% annually — the most common range for qualified borrowers.
• 700–719: 0.65%–0.85% annually — rates start to increase noticeably at this tier.
• 680–699: 0.85%–1.15% annually — fair credit adds significant monthly cost.
• 660–679: 1.1%–1.5% annually — borrowers in this range pay 3–4 times more than 760+ borrowers.
• Below 660: 1.3%–2.0%+ annually — some lenders may not offer PMI at all below 620.

Improving your credit score by even 20–40 points before applying for a mortgage can save thousands in PMI costs over the life of the loan. The Urban Institute reports that borrowers with scores above 740 pay an average of 60% less in PMI than those with scores below 680.

How to Remove PMI Faster

PMI is not permanent — there are several strategies to eliminate it ahead of schedule and save money. Under the Homeowners Protection Act of 1998, you have legal rights regarding PMI cancellation:

• Automatic cancellation at 78% LTV: Your lender must cancel PMI when your loan balance reaches 78% of the original purchase price through scheduled payments, with no action required from you.
• Borrower-requested cancellation at 80% LTV: You can request PMI removal once your balance hits 80% of the original value. You must be current on payments with a good payment history and no junior liens.
• Make extra principal payments: Paying even $200 extra per month toward principal accelerates equity building and can remove PMI years earlier. Specify that extra payments go to principal, not future payments.
• Home reappraisal: If your home has appreciated significantly, a new appraisal showing at least 20% equity can trigger PMI removal. Some lenders require 25% equity if you have had the loan for less than 5 years.
• Refinance: If your home value has increased enough to put you at or above 80% LTV, refinancing into a new loan without PMI can save money — especially if interest rates have also dropped.

This calculator shows the exact month when your PMI drops off based on your amortization schedule. Use the extra payment feature to see how accelerating principal payments moves the removal date forward.

PMI vs Other Low Down Payment Options

PMI applies specifically to conventional loans, but other loan types have their own forms of mortgage insurance with different rules and costs:

• FHA Mortgage Insurance Premium (MIP): FHA loans require both an upfront MIP of 1.75% of the loan amount and an annual MIP of 0.55% for most borrowers. Unlike conventional PMI, FHA MIP lasts the entire loan term if you put less than 10% down — it never drops off automatically. Borrowers must refinance to a conventional loan to remove it.
• VA Funding Fee: VA loans require no monthly mortgage insurance but charge a one-time funding fee of 1.25% to 3.3% of the loan amount, depending on service history and down payment. This fee can be rolled into the loan. Disabled veterans are exempt.
• USDA Guarantee Fee: USDA loans charge an upfront guarantee fee of 1% and an annual fee of 0.35% of the loan balance. The annual fee lasts the life of the loan but is the lowest of all government-backed insurance options.

For borrowers with credit scores above 720 and at least 5% down, conventional loans with PMI are often cheaper than FHA loans over the long term because PMI can be removed while FHA MIP cannot. Use this PMI calculator alongside our FHA vs Conventional Comparison tool to determine which option costs less for your situation. Sources: cfpb.gov, mgic.com, urban.org. Last updated: May 2026.