PMI Calculator

A PMI Calculator helps estimate your monthly private mortgage insurance payment. PMI is usually required when a home buyer makes a down payment of less than 20%.

PMI Calculator

What is PMI

PMI stands for private mortgage insurance. It is an extra cost some home buyers pay when they make a down payment below 20%.

PMI protects the lender, not the borrower. Even though the borrower pays for it, the insurance helps reduce the lender’s risk.

How the Calculator Works

The calculator uses your home price, down payment, and annual PMI rate.

Formula:

Loan Amount = Home Price − Down Payment

Annual PMI = Loan Amount × PMI Rate

Monthly PMI = Annual PMI ÷ 12

Example

Suppose:

Home price: $300,000
Down payment: $30,000
Loan amount: $270,000
PMI rate: 0.5%

Annual PMI:

$270,000 × 0.005 = $1,350

Monthly PMI:

$1,350 ÷ 12 = $112.50

Estimated PMI:

$112.50 per month

Real Life Uses

This calculator can help you:

  • Estimate your full monthly mortgage cost
  • Compare different down payment amounts
  • Understand the cost of buying with less than 20% down
  • Plan your home-buying budget
  • Decide whether saving a larger down payment may help

You can also use our Mortgage Calculator to estimate your full monthly payment.

Tips

Try testing different down payment amounts. Even a slightly larger down payment may lower your PMI cost.

You can also compare your total monthly payment with our Escrow Calculator, which includes taxes and insurance.

Common Mistakes to Avoid

Forgetting PMI in your budget

Many home buyers only think about principal and interest, but PMI can add extra cost each month.

Using the wrong PMI rate

PMI rates can vary, so use your lender’s estimated rate if you have one.

Assuming PMI lasts forever

PMI may be removed later when you reach sufficient home equity, depending on your loan type and your lender’s rules.

Why Use This Calculator

This calculator helps you estimate a cost that many home buyers forget. It gives you a clearer idea of what your monthly mortgage payment may really look like.

PMI Calculator FAQs

What is PMI?

PMI stands for private mortgage insurance. It is usually required when a buyer puts less than 20% down on a conventional mortgage.

Who does PMI protect?

PMI protects the lender, not the borrower.

Do I need PMI with a 20% down payment?

Usually, no. PMI is commonly required when the down payment is less than 20%.

How is PMI calculated?

PMI is usually calculated as a percentage of the loan amount.

Can PMI be removed?

In many cases, yes. PMI may be removed once the borrower reaches enough equity in the home.

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