Calculate Private Mortgage Insurance (PMI)
Estimate your monthly PMI payment and when it drops off. See how extra payments eliminate PMI faster.
What Is PMI?
Private Mortgage Insurance is required when your down payment is less than 20% of the home price. It protects the lender (not you) if you default. PMI costs 0.2-1.5% of the loan amount annually, depending on your credit score and LTV ratio. On a $360,000 loan, PMI ranges from $60-450/month. PMI automatically drops off when your LTV reaches 78%, or you can request removal at 80%.
How to Eliminate PMI Faster
Three strategies: Extra principal payments — even $200/month extra accelerates equity building. Home value increase — if your home appreciates significantly, get a new appraisal to prove 20% equity. Lender-paid PMI (LPMI) — the lender charges a slightly higher interest rate instead of separate PMI. LPMI cannot be removed but may cost less over the loan term for buyers who will refinance within 5-7 years.
A counter-intuitive PMI strategy: if you have enough for 15% down but not 20%, consider putting down 15% and keeping the extra 5% invested. If your investments earn more than the PMI costs (compare PMI rate vs expected investment return), you come out ahead mathematically — especially since PMI is temporary.
