Quick answer: Private mortgage insurance (PMI) applies when you put less than 20% down on a conventional loan, and it typically costs 0.3% to 1.5% of the loan per year — often $100–$300 a month. The calculator below adds PMI automatically: set Loan type to Conventional and a down payment under 20%, and your true monthly payment includes it.
Most mortgage calculators quietly leave out PMI, so the monthly payment they show you is lower than what you will actually pay. If you are putting down less than 20%, private mortgage insurance is a real line item — and on a $400,000 home it can add over $2,000 a year to your cost.
This calculator builds PMI into the breakdown. Change your down payment and watch the PMI line appear or disappear at the 20% mark, so you can see exactly what a smaller down payment really costs.
Tip: set Loan type to Conventional and enter a down payment under 20% — PMI appears automatically in the donut breakdown. Raise it to 20%+ and PMI disappears.
Mortgage payment calculator
P&I, tax, insurance, PMI & HOA — by loan type, all in one place
| Year | Principal | Interest | Balance |
|---|
What is PMI and when do you pay it?
PMI protects the lender — not you — if you default. Conventional loans require it whenever your down payment is below 20% (a loan-to-value ratio above 80%). It is not a permanent cost: once you build 20% equity, you can remove it, which is what makes it different from FHA mortgage insurance.
You do not pay PMI on VA loans (none) or USDA loans (a smaller guarantee fee instead), and FHA loans use their own MIP rather than PMI. PMI is specific to conventional financing with less than 20% down.
How much does PMI cost?
Your PMI rate depends mostly on your credit score and how much you put down. Lower credit and lower down payments mean higher PMI. Here is the typical annual range on a conventional loan, and what it works out to monthly on a $360,000 loan (10% down on a $400,000 home).
| Credit score | Annual PMI rate | Monthly PMI ($360k loan) |
|---|---|---|
| 760+ | 0.30% – 0.40% | $90 – $120 |
| 740–759 | 0.40% – 0.55% | $120 – $165 |
| 700–739 | 0.55% – 0.85% | $165 – $255 |
| 680–699 | 0.85% – 1.10% | $255 – $330 |
| 620–679 | 1.10% – 1.50% | $330 – $450 |
The calculator uses a mid-range estimate of about 0.55% per year. Your lender's actual quote will vary with the insurer and your full profile, but this gives you a realistic planning number.
How to get rid of PMI
PMI is temporary, and removing it is one of the easiest ways to cut your payment:
- Automatic termination at 78% LTV. By federal law (the Homeowners Protection Act), your lender must cancel PMI automatically once your balance reaches 78% of the original value, as long as you are current.
- Request cancellation at 80% LTV. You can ask in writing once you reach 20% equity based on the original purchase price — don't wait for 78%.
- Get a new appraisal. If your home value has risen, a fresh appraisal can push you past 20% equity sooner.
- Make extra payments. Reaching 20% equity faster removes PMI faster — see our extra-payment calculator.
How to avoid PMI without 20% down
If you can't reach 20% but want to skip PMI, you have options — each with a trade-off:
Compare the real cost. A piggyback "80-10-10" loan (an 80% first mortgage, a 10% second, and 10% down) avoids PMI but adds a higher-rate second mortgage. Lender-paid PMI (LPMI) folds the cost into a higher interest rate — cheaper monthly but permanent. A VA loan (if eligible) has no monthly mortgage insurance at all. Run each scenario in the calculator before deciding.
Worked example: 10% vs. 20% down on a $400,000 home
The clearest way to understand PMI is to compare two paths on the same house. Say you're buying at $400,000 with a 6.85% rate over 30 years.
- 20% down ($80,000): $320,000 loan, no PMI. Principal and interest run about $2,097/month.
- 10% down ($40,000): $360,000 loan plus roughly $165/month in PMI. Principal, interest, and PMI run about $2,524/month.
Putting down 10% instead of 20% keeps $40,000 in your pocket but costs about $165 extra per month in PMI plus the higher principal and interest on the larger loan. The PMI portion, however, is temporary: at 6.85% you'd reach the 78% loan-to-value automatic-cancellation point in roughly 9–10 years of regular payments — sooner if your home appreciates or you make extra payments. Many buyers decide the smaller down payment is worth it to buy sooner, then shed PMI later. Run both scenarios above to see your own break-even.
How lenders set your PMI rate
PMI isn't a flat fee — mortgage insurers price it on risk. The biggest factors are your credit score and your loan-to-value ratio (how little you put down), but lenders also weigh your debt-to-income ratio, the loan term, and whether the rate is fixed or adjustable. You may also be offered different premium structures: borrower-paid monthly PMI (the most common, and what the calculator models), a single upfront premium paid at closing, or lender-paid PMI baked into a higher interest rate. Monthly PMI is usually the most flexible because it disappears once you reach 20% equity, whereas lender-paid PMI is permanent for the life of the loan.
Frequently asked questions
- CFPB — What is private mortgage insurance? — federal explainer on how PMI works and your cancellation rights.
- CFPB — Removing PMI — the official 78%/80% LTV cancellation rules under the Homeowners Protection Act.
- Federal Housing Finance Agency (FHFA) — regulator of Fannie Mae and Freddie Mac, which set conventional PMI eligibility.
- HUD — Buying a home — federal hub for loan-type comparisons and homebuyer guidance.
Last reviewed: June 1, 2026. See our data sources and editorial methodology for how we research every article.