PMI Calculator: Calculate Your Monthly Mortgage Insurance Cost
Private mortgage insurance (PMI) is required for conventional home loans when making a down payment less than 20%. Here's what you need to know about PMI costs and calculations.
PMI Cost Factors:
- Loan size
- Down payment amount
- Credit score
- Debt-to-income ratio
Annual PMI Rates by Credit Score:
- 760+ : 0.46%
- 740-759: 0.58%
- 720-739: 0.70%
- 700-719: 0.79%
- 680-699: 0.98%
- 660-679: 1.23%
- 640-659: 1.31%
- 620-639: 1.50%
Example PMI Cost: For a $300,000 mortgage:
- Annual cost: $1,380 to $4,500
- Monthly cost: $115 to $375
How to Reduce PMI Costs:
- Make a larger down payment
- Improve your credit score
- Lower your debt-to-income ratio
- Shop around for lenders
Removing PMI:
- Automatically terminates when loan balance reaches 78% of original home value
- Can request removal when reaching 80% loan-to-value ratio
- Make extra payments to reach these milestones faster
Calculating Your PMI: To estimate your PMI costs, you'll need:
- Home purchase price
- Down payment amount
- Interest rate
- Credit score
- Loan term
PMI makes homeownership possible with smaller down payments, but consider if the additional monthly cost fits your budget. If not, either save for a larger down payment or look for homes in a lower price range.
Remember: A 20% down payment eliminates the need for PMI entirely.