PMI Calculator

Why use the Private Mortgage Insurance calculator?


The Private Mortgage Insurance calculator can determine the amount of private mortgage insurance (PMI) you will need to pay when taking out a mortgage loan. It can also estimate the total monthly mortgage payment, including PMI, based on the loan amount, loan term, and interest rate. Additionally, the calculator can help you determine how much money you can save by increasing your down payment and avoiding PMI altogether.


PMI, or private mortgage insurance, is a type of insurance that is required by lenders when a borrower is unable to make a down payment of at least 20% of the home's purchase price. PMI is designed to protect the lender in the event that the borrower defaults on the loan.

The formula for calculating PMI is as follows:

PMI = (1 - (1 / (1 + PMI Rate) (Loan Term * 12) / (1 - (1 / (1 + PMI Rate) (Loan Term * 12) / (1 - (1 / (1 + PMI Rate) (Loan Term * 12)


  • The annual premium rate for PMI is expressed as a decimal.
  • The loan amount is the total amount of the mortgage loan.
  • The loan term is the number of years the loan will last, which is usually 15 or 30 years.

For example, let's say you are buying a home for $200,000 and you are making a down payment of 5% ($10,000). Your loan amount would be $190,000. The PMI rate is 0.5%, and the loan term is 30 years.

Plugging these numbers into the formula, we get:

PMI = ($190,000 * 0.005)/(30 * 12) = $57.62/month

So, the monthly PMI premium for this loan would be $57.62. This amount will be added to the borrower's monthly mortgage payment until the loan-to-value ratio reaches 78%, or the borrower can request the lender cancel the insurance once the value of the home increases and the outstanding loan decreases.

It's important to note that PMI rates and terms can vary depending on the lender, so it's a good idea to shop around and compare rates before choosing a lender. Some borrowers may also be able to avoid PMI by finding a lender who offers alternative loan programs, such as lender-paid mortgage insurance or piggyback loans.