Finance

PMI Calculator

Estimate monthly PMI from your loan amount, property value, interest rate, term, and quoted premium. Compare the 80% cancellation-request point with automatic termination at 78% of the original value.

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What is PMI Calculator?

On a new conventional loan, PMI is required whenever the origination LTV is strictly above 80%. The threshold sits on the loan amount at closing: put 80,000 down on a 400,000 home and you borrow 320,000, which is exactly 80.000% — no mortgage insurance. Borrow 360,000 instead, as in the PMI preset, and the ratio is 90%, so insurance applies. The premium is not a fixed fee: it is priced as an annual percentage of the balance and billed monthly, so the first month on the 360,000 loan at a 0.5% premium costs 150.00 and shrinks as the balance amortises. FHA loans run their own system entirely — an upfront guarantee fee plus annual mortgage insurance premiums that last 11 years with at least 10% down and for the life of the loan below that — so the 80/78 logic on this page is deliberately conventional-only.

When to Use This Calculator

  • You are comparing two purchase offers and want to know which down payment clears mortgage insurance fastest.
  • You hit 80% LTV and want the exact month to send a cancellation request rather than waiting for the servicer.
  • Home prices dipped and you want to see how close the balance is to the 78% automatic cut-off at the original value.
  • The 0.5% premium default is a best-case quote. A lower credit score can double it — plug your real number into the premium field.
  • You can ask your servicer to cancel conventional PMI once the balance reaches 80% of the ORIGINAL value, provided your payment history is current and the appraisal supports the value. On the 400,000/360,000 preset the schedule first touches the 320,000 request floor at month 98, when the balance sits at 319,623.85 — an LTV of 79.91%. Send the request then rather than waiting, because the automatic date runs later. The request is free, it must be handled in writing, and the servicer may order an appraisal at your expense — if the value has fallen, the request can be denied even though the amortisation math checks out. That is why this calculator measures every threshold against the original value: it mirrors what the servicer will actually compute, with no credit for market appreciation.
  • Under the Homeowners Protection Act, conventional PMI terminates automatically the first day of the month after the balance reaches 78% of the original value — measured on the original amortisation schedule, not on today's market value and not on extra payments you made later. On the default PMI example the 78% line is 312,000, and the schedule first crosses it at month 112 with a balance of 311,823.69, an LTV of 77.96%. Total premium paid up to that point is 15,802.85, against 13,959.20 if the servicer had stopped it at your 80% request floor in month 98 — a 1,843.65 difference for the cost of one letter. Two carve-outs matter: if you are behind on payments the servicer does not have to terminate, and if the loan is in negative amortisation or you defaulted, the automatic right can be suspended.

Steps:

  1. Open the PMI tab, add the note rate, the term in months and the annual PMI premium you were quoted.
  2. The schedule shows the request floor month — when the balance first touches 80% of the original value — and the automatic cut-off month at 78%.
  3. Compare the two premium totals, then use the sensitivity grid to see how a different rate or appraised value moves the cut-off.
  4. Enter the property value the lender will appraise — every threshold in the calculator is measured against this original number.
  5. You can ask your servicer to cancel conventional PMI once the balance reaches 80% of the ORIGINAL value, provided your payment history is current and the appraisal supports the value. On the 400,000/360,000 preset the schedule first touches the 320,000 request floor at month 98, when the balance sits at 319,623.85 — an LTV of 79.91%. Send the request then rather than waiting, because the automatic date runs later. The request is free, it must be handled in writing, and the servicer may order an appraisal at your expense — if the value has fallen, the request can be denied even though the amortisation math checks out. That is why this calculator measures every threshold against the original value: it mirrors what the servicer will actually compute, with no credit for market appreciation.
  6. Under the Homeowners Protection Act, conventional PMI terminates automatically the first day of the month after the balance reaches 78% of the original value — measured on the original amortisation schedule, not on today's market value and not on extra payments you made later. On the default PMI example the 78% line is 312,000, and the schedule first crosses it at month 112 with a balance of 311,823.69, an LTV of 77.96%. Total premium paid up to that point is 15,802.85, against 13,959.20 if the servicer had stopped it at your 80% request floor in month 98 — a 1,843.65 difference for the cost of one letter. Two carve-outs matter: if you are behind on payments the servicer does not have to terminate, and if the loan is in negative amortisation or you defaulted, the automatic right can be suspended.

Formula

PMI_monthly = B_m × r_PMI ÷ 12; request cancellation: B_m ≤ 0.80 × V_0; automatic termination: B_m ≤ 0.78 × V_0.

Use Cases

  • You are comparing two purchase offers and want to know which down payment clears mortgage insurance fastest.
  • You hit 80% LTV and want the exact month to send a cancellation request rather than waiting for the servicer.
  • Home prices dipped and you want to see how close the balance is to the 78% automatic cut-off at the original value.
  • The 0.5% premium default is a best-case quote. A lower credit score can double it — plug your real number into the premium field.
  • You can ask your servicer to cancel conventional PMI once the balance reaches 80% of the ORIGINAL value, provided your payment history is current and the appraisal supports the value. On the 400,000/360,000 preset the schedule first touches the 320,000 request floor at month 98, when the balance sits at 319,623.85 — an LTV of 79.91%. Send the request then rather than waiting, because the automatic date runs later. The request is free, it must be handled in writing, and the servicer may order an appraisal at your expense — if the value has fallen, the request can be denied even though the amortisation math checks out. That is why this calculator measures every threshold against the original value: it mirrors what the servicer will actually compute, with no credit for market appreciation.

Key Benefits

  • The exact request-floor and automatic cut-off months, not a vague 'roughly eight years' answer, so you know when to act.
  • Full export, print report and step-by-step arithmetic — every displayed figure can be traced back to a formula on the page.
  • Diarise the month you cross 80% and send the cancellation request then — waiting for the automatic 78% cut-off costs about 1,843.65 on the default example.
  • One extra principal payment early in the schedule pulls month 112 forward: the cut-off depends on balance, not on the calendar date.
  • On the 90% PMI preset the first month's premium is 150.00 (360,000 × 0.5% ÷ 12), shrinking to 130.17 by month 112 as the balance amortises down.
  • Requesting removal at the 80% floor lands at month 98 against the automatic month 112: total premium 13,959.20 versus 15,802.85, a difference of 1,843.65.

Common Mistakes to Avoid

  • Measuring the 78% cut-off against today's market value. The law uses the ORIGINAL value at origination, so a rising price does not end PMI sooner.
  • Treating 80% as the automatic end date. 80% is the point where you may REQUEST removal; the automatic end is 78% on the original amortisation.
  • Applying conventional logic to FHA. FHA premiums run 11 years with at least 10% down and for the life of the loan below that.
  • Forgetting the premium inside the payment. A 150.00 first-month PMI is real money and should sit next to principal and interest when you budget.
  • Above 97% LTV most conventional programs stop accepting applications, and mortgage insurance on high-LTV loans can last for the life of the loan.

Key Terms Explained

Loan-to-value ratio:
loan balance divided by property value, times 100. The single number that drives mortgage-insurance obligations and pricing tiers.
Combined LTV (CLTV):
every secured balance — first lien plus juniors — divided by the value. What lenders actually qualify on for HELOCs and cash-out loans.
Private mortgage insurance:
monthly insurance protecting the lender, not you, required on new conventional loans above 80% LTV.
Equity:
value minus total debt. Shown here in both currency and as a share of the value so a price dip can be judged instantly.
Homeowners Protection Act:
the federal law behind the 78% automatic termination and the 80% borrower-request right on conventional loans.
Request floor:
the first month the balance sits at or below 80% of the original value — the earliest point a cancellation request can take effect.
Automatic cut-off:
the first month the balance sits at or below 78% of the original value, when PMI ends without any request.
Amortisation schedule:
the fixed month-by-month balance path the cut-offs are measured on; a shorter term or extra principal moves both earlier.

Related Concepts

  • Mortgage Calculator: run the full amortisation for any rate you are quoted and see the principal and interest split month by month.
  • Home Affordability Calculator – How Much House: work backwards from income and debts to the purchase price your LTV should start from.
  • DSCR Calculator: the investor-side ratio lenders pair with LTV when the property is a rental rather than a residence.
  • Cap Rate Calculator: net operating income against price — the yield view that sits beside the financing view of the same deal.

Interpreting Your Results

On a new conventional loan, PMI is required whenever the origination LTV is strictly above 80%. The threshold sits on the loan amount at closing: put 80,000 down on a 400,000 home and you borrow 320,000, which is exactly 80.000% — no mortgage insurance. Borrow 360,000 instead, as in the PMI preset, and the ratio is 90%, so insurance applies. The premium is not a fixed fee: it is priced as an annual percentage of the balance and billed monthly, so the first month on the 360,000 loan at a 0.5% premium costs 150.00 and shrinks as the balance amortises. FHA loans run their own system entirely — an upfront guarantee fee plus annual mortgage insurance premiums that last 11 years with at least 10% down and for the life of the loan below that — so the 80/78 logic on this page is deliberately conventional-only. You can ask your servicer to cancel conventional PMI once the balance reaches 80% of the ORIGINAL value, provided your payment history is current and the appraisal supports the value. On the 400,000/360,000 preset the schedule first touches the 320,000 request floor at month 98, when the balance sits at 319,623.85 — an LTV of 79.91%. Send the request then rather than waiting, because the automatic date runs later. The request is free, it must be handled in writing, and the servicer may order an appraisal at your expense — if the value has fallen, the request can be denied even though the amortisation math checks out. That is why this calculator measures every threshold against the original value: it mirrors what the servicer will actually compute, with no credit for market appreciation. Under the Homeowners Protection Act, conventional PMI terminates automatically the first day of the month after the balance reaches 78% of the original value — measured on the original amortisation schedule, not on today's market value and not on extra payments you made later. On the default PMI example the 78% line is 312,000, and the schedule first crosses it at month 112 with a balance of 311,823.69, an LTV of 77.96%. Total premium paid up to that point is 15,802.85, against 13,959.20 if the servicer had stopped it at your 80% request floor in month 98 — a 1,843.65 difference for the cost of one letter. Two carve-outs matter: if you are behind on payments the servicer does not have to terminate, and if the loan is in negative amortisation or you defaulted, the automatic right can be suspended. The purchase price — more precisely, the original value the loan was written against. The Homeowners Protection Act computes both the 78% automatic termination and the 80% request threshold as percentages of the original value, which is why this calculator never lets you move the denominator. If you bought at 400,000 and the market later pushes the home to 460,000, the automatic line stays at 312,000 and the request floor stays at 320,000; appreciation does not pull the date forward. The flip side is also true: if the value falls, the thresholds do not rise to meet you — the schedule simply keeps amortising toward the same fixed currency lines. Appraisals matter for the request path only, because the servicer can refuse a cancellation if the supporting value has dropped below what the 80% of original value implies for their security position.

Frequently Asked Questions

When is private mortgage insurance (PMI) required?
On a new conventional loan, PMI is required whenever the origination LTV is strictly above 80%. The threshold sits on the loan amount at closing: put 80,000 down on a 400,000 home and you borrow 320,000, which is exactly 80.000% — no mortgage insurance. Borrow 360,000 instead, as in the PMI preset, and the ratio is 90%, so insurance applies. The premium is not a fixed fee: it is priced as an annual percentage of the balance and billed monthly, so the first month on the 360,000 loan at a 0.5% premium costs 150.00 and shrinks as the balance amortises. FHA loans run their own system entirely — an upfront guarantee fee plus annual mortgage insurance premiums that last 11 years with at least 10% down and for the life of the loan below that — so the 80/78 logic on this page is deliberately conventional-only.
When can I request removal of PMI?
You can ask your servicer to cancel conventional PMI once the balance reaches 80% of the ORIGINAL value, provided your payment history is current and the appraisal supports the value. On the 400,000/360,000 preset the schedule first touches the 320,000 request floor at month 98, when the balance sits at 319,623.85 — an LTV of 79.91%. Send the request then rather than waiting, because the automatic date runs later. The request is free, it must be handled in writing, and the servicer may order an appraisal at your expense — if the value has fallen, the request can be denied even though the amortisation math checks out. That is why this calculator measures every threshold against the original value: it mirrors what the servicer will actually compute, with no credit for market appreciation.
When does PMI end automatically without a request?
Under the Homeowners Protection Act, conventional PMI terminates automatically the first day of the month after the balance reaches 78% of the original value — measured on the original amortisation schedule, not on today's market value and not on extra payments you made later. On the default PMI example the 78% line is 312,000, and the schedule first crosses it at month 112 with a balance of 311,823.69, an LTV of 77.96%. Total premium paid up to that point is 15,802.85, against 13,959.20 if the servicer had stopped it at your 80% request floor in month 98 — a 1,843.65 difference for the cost of one letter. Two carve-outs matter: if you are behind on payments the servicer does not have to terminate, and if the loan is in negative amortisation or you defaulted, the automatic right can be suspended.
Does the 78% rule use today's value or the purchase price?
The purchase price — more precisely, the original value the loan was written against. The Homeowners Protection Act computes both the 78% automatic termination and the 80% request threshold as percentages of the original value, which is why this calculator never lets you move the denominator. If you bought at 400,000 and the market later pushes the home to 460,000, the automatic line stays at 312,000 and the request floor stays at 320,000; appreciation does not pull the date forward. The flip side is also true: if the value falls, the thresholds do not rise to meet you — the schedule simply keeps amortising toward the same fixed currency lines. Appraisals matter for the request path only, because the servicer can refuse a cancellation if the supporting value has dropped below what the 80% of original value implies for their security position.
How can I lower my LTV quickly?
There are only two levers: raise the value or shrink the balance, and only the balance is under your control. Any one-time principal payment drops the ratio by exactly the payment divided by the value — 10,000 against the 400,000 example is 2.5 LTV points. On the PMI preset, paying the balance from 360,000 down to the 320,000 request floor needs 40,000 of principal, which is 10 points of LTV and moves you from 90% to the 80% line. Recurring extra principal works even better because it compounds against the amortisation: each dollar goes entirely to balance, and every threshold — 80% at month 98, 78% at month 112 — arrives sooner. The third lever, a higher appraised value, is not something you engineer, but a solid appraisal at purchase or refinance can lift the denominator and drop the ratio without touching the balance.
What is a good LTV ratio?
As a working rule, 80% is good, 90% is manageable, 97% is the practical ceiling for conventional purchase money, and anything above 100% means you owe more than the property is worth. At 80% on the default preset you hold 80,000 of equity — 20% of the asset — you avoid mortgage insurance entirely, and you price in the best conventional tier. Between 80% and 97% the loan is still financeable but mortgage insurance applies and the pricing add-ons grow with every point. Above 97% most conventional programs close their doors; government or portfolio products take over with their own insurance rules. Above 100%, as in a 430,000 balance against a 400,000 value (107.5% LTV, equity of negative 30,000), refinancing options narrow sharply and selling means bringing cash to the table. Good is contextual — an investor may run 75% on purpose for leverage — but for a primary residence the durable target is at or below 80%.
How is LTV different from home equity?
They are two readings of the same subtraction: equity is value minus total debt in currency, LTV is debt divided by value in percent, and one is always the mirror of the other — equity share equals 100% minus LTV. A 400,000 property with a 320,000 loan holds 80,000 of equity, which is 20% of the value, and the LTV is exactly 80.000%. Move the loan to 340,000 and equity falls to 60,000 (15%) while LTV rises to 85.000%. The currency figure matters for decisions — it is the real money behind a sale, a HELOC draw or a refinance — while the percentage is what lenders gate on, because it normalises across properties of different prices. When the balance exceeds the value the two measures diverge in feel but not in math: equity of negative 30,000 against a 400,000 home is an LTV of 107.5%, and both say the same thing — you are underwater.
What is loan-to-value ratio (LTV)?
Loan-to-value ratio is the share of a property's value that you owe. Divide the loan balance by the value and multiply by 100: on the default preset here, a 320,000 loan against a 400,000 property is 320,000 ÷ 400,000 × 100 = 80.000%. The other side of the same number is equity — 400,000 minus 320,000 leaves 80,000, or 20% of the asset. Lenders treat LTV as the primary risk dial: the more of the asset financed, the smaller the cushion between a default and their loss, so LTV determines whether mortgage insurance is required, which pricing tier you land in, and how much equity you can ever borrow against. It is not a credit score and it does not look at your income — it is strictly a balance-versus-value measurement, recomputed every time one of the two sides moves.
Does the PMI premium vary by borrower?
The 0.5% premium default is a best-case quote. A lower credit score can double it — plug your real number into the premium field.
Do extra principal payments move the PMI end date sooner?
One extra principal payment early in the schedule pulls month 112 forward: the cut-off depends on balance, not on the calendar date.

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