PMI Calculator

What PMI is — and how to get rid of it

Private Mortgage Insurance exists to protect the lender, not you. When you put down less than 20% on a conventional loan, the bank sees a riskier borrower and charges a monthly premium to cover itself in case of default. It's bundled right into your mortgage payment, typically running somewhere between 0.3% and 1.5% of the loan each year depending on your credit score and down payment. On a $360,000 loan at 0.7%, that's about $210 a month landing on top of your principal and interest — money that builds you no equity at all.

The good news is that PMI is temporary. As you pay down the loan and your home (hopefully) appreciates, your loan-to-value ratio falls. Once you reach 80% LTV — meaning you've built 20% equity — you can formally request that your lender cancel PMI. And by law, on most loans the servicer must drop it automatically once the balance reaches 78% of the original value, no request needed. This calculator amortizes your loan to estimate exactly when that crossover happens and tallies how much PMI you'll have paid in the meantime.

Knowing that timeline is powerful. If you're close to the 20% line, even a few extra principal payments can knock months or years off your PMI and save thousands. Some buyers also use a larger down payment, a piggyback second loan, or lender-paid PMI to sidestep it entirely. Note that FHA loans work differently — their mortgage insurance often lasts the life of the loan, so the rules here apply to conventional mortgages.