Private Mortgage Insurance Cost & Removal Date
Last reviewed: May 2026
A PMI (Private Mortgage Insurance) calculator estimates your monthly PMI cost based on your loan amount, down payment percentage, and credit score. PMI is required on conventional mortgages when your down payment is less than 20% — it protects the lender (not you) against default. PMI typically costs 0.5–1.5% of the loan amount annually, adding $100–$450/month to your housing payment on a typical loan.1
| Down Payment | Credit 760+ | Credit 700–759 | Credit 640–699 | On $350K Loan |
|---|---|---|---|---|
| 3% | 0.55% | 0.78% | 1.30% | $160–$380/mo |
| 5% | 0.41% | 0.62% | 1.10% | $120–$320/mo |
| 10% | 0.30% | 0.47% | 0.85% | $88–$248/mo |
| 15% | 0.19% | 0.33% | 0.65% | $55–$190/mo |
| 20%+ | None | None | None | $0 |
For conventional loans, you can request PMI cancellation once you reach 20% equity (80% loan-to-value). The lender must automatically cancel PMI at 78% LTV. You can reach 20% equity through regular payments, extra principal payments, or home appreciation. If your home has appreciated significantly, a new appraisal ($400–$600) can demonstrate 20% equity earlier than scheduled. FHA loans are different — mortgage insurance (MIP) lasts for the life of the loan regardless of equity. The only way to remove FHA MIP is to refinance into a conventional loan once you have 20% equity.2
Conventional PMI is removable at 20% equity. FHA MIP is permanent (0.85%/year plus 1.75% upfront). VA loans charge a one-time funding fee (1.25–3.3%) but never charge ongoing mortgage insurance. For borrowers with 10–15% down and good credit, conventional PMI is almost always cheaper than FHA MIP over the loan's life because it can be removed. For borrowers with lower credit or minimal down payment, FHA may offer lower rates despite the permanent MIP.3
Not always. If saving from 10% to 20% takes 3 years, you're paying rent during that time instead of building equity. PMI at $200/month for 5 years costs $12,000 total — compare that to 3 years of rent ($72,000+ at $2,000/month) while saving. Run the numbers for your specific situation with our Rent vs Buy Calculator.4
Private mortgage insurance (PMI) is required by conventional mortgage lenders when you put less than 20% down on a home purchase. PMI protects the lender (not you) against losses if you default on the loan. The cost typically ranges from 0.3% to 1.5% of the original loan amount annually, depending on your credit score, down payment percentage, and loan type. On a $350,000 mortgage with 10% down and a 0.7% PMI rate, you will pay approximately $184/month ($2,205/year) in PMI on top of your principal, interest, taxes, and insurance payments.
| Down Payment | 760+ Credit | 720–759 | 680–719 | 640–679 |
|---|---|---|---|---|
| 3% | 0.42% | 0.58% | 0.86% | 1.30% |
| 5% | 0.35% | 0.49% | 0.72% | 1.10% |
| 10% | 0.22% | 0.33% | 0.52% | 0.85% |
| 15% | 0.15% | 0.24% | 0.38% | 0.65% |
A borrower with a 680 credit score putting 5% down pays roughly twice the PMI rate of a borrower with a 760+ score at the same down payment — an extra $100–$150/month on a $350,000 loan.
Under federal law (the Homeowners Protection Act), borrower-paid PMI must be automatically terminated when your loan-to-value ratio reaches 78% of the original purchase price through scheduled payments. You can request cancellation earlier — at 80% LTV — by contacting your servicer. Some lenders require a new appraisal to confirm the home's current value. If your home has appreciated significantly, you may reach 80% LTV faster than the original amortization schedule projected. Refinancing to a new loan with at least 20% equity also eliminates PMI entirely. Track your equity buildup and PMI removal timeline with our Mortgage Payment Calculator.
Borrower-paid monthly PMI (BPMI) is the most common form — a monthly premium added to your payment that is cancellable once you reach 20% equity. Lender-paid PMI (LPMI) eliminates the separate payment but the lender charges a higher interest rate to compensate, and unlike BPMI, this higher rate is permanent for the life of the loan. Single-premium PMI pays the entire PMI cost upfront at closing (or finances it into the loan), which can save money if you plan to keep the mortgage long-term. Split-premium PMI combines a smaller upfront payment with reduced monthly premiums. The optimal choice depends on how long you plan to hold the mortgage and whether the upfront cost or monthly cash flow is your priority.
Instead of paying PMI, some buyers use a piggyback loan structure — an 80/10/10 (80% first mortgage, 10% second mortgage/HELOC, 10% down payment) avoids PMI by keeping the first mortgage at 80% LTV. The second mortgage carries a higher interest rate, but it may still be cheaper than PMI depending on your credit profile and loan size. Another alternative is simply waiting until you have 20% saved — but in appreciating markets, the price increase during the saving period can exceed the PMI cost. Compare the total cost of buying now with PMI versus waiting with our Rent vs Buy Calculator and Down Payment Calculator.
FHA loans charge their own version of mortgage insurance called MIP (Mortgage Insurance Premium), which differs from conventional PMI in important ways. FHA MIP includes an upfront premium of 1.75% of the loan amount plus an annual premium of 0.55% for most borrowers — and crucially, FHA MIP cannot be removed for the life of the loan if you put less than 10% down. This permanence makes FHA loans more expensive long-term than conventional loans with PMI for borrowers who plan to stay in the home. Once you build equity, refinancing from FHA to conventional eliminates the MIP entirely. Compare FHA and conventional scenarios with our FHA Loan Calculator and our Home Affordability Calculator.
Many buyers delay purchasing to avoid PMI, but this strategy can backfire in appreciating markets. If home prices increase 5% annually, a $400,000 home costs $420,000 in one year and $441,000 in two years. A buyer who purchases now with 5% down ($20,000) and pays PMI of $180/month for 5 years spends $10,800 total on PMI. But the buyer who waits 2 years to save a 20% down payment faces a purchase price of $441,000 — paying $41,000 more for the same home (less the $10,800 PMI savings, still $30,200 worse off). Additionally, the buyer who purchased earlier has been building equity through mortgage payments and appreciation during those two years. In most markets, buying with PMI and removing it later is more financially advantageous than waiting to avoid PMI entirely.
Accelerate your path to 80% LTV by making extra principal payments, which reduce the loan balance faster than the standard amortization schedule. Even an extra $200/month toward principal can cut the PMI period by 2–3 years. Home improvements that increase appraised value can also help — a kitchen renovation or bathroom remodel may push your home's value high enough that a new appraisal shows 80% LTV sooner than expected. Additionally, rapid market appreciation in your area may naturally bring your LTV below 80% without extra payments. Request a broker price opinion or appraisal annually to check whether you qualify for PMI removal ahead of schedule. Model the impact of extra payments on your equity timeline with our Extra Payment Calculator.
→ Improve your credit score before buying. A 760+ score can cut PMI rates in half compared to a 680 score.
→ Request removal at 20%, don't wait for automatic. Automatic cancellation at 78% LTV can be years later than the 80% threshold where you can request cancellation.
→ Consider lender-paid PMI (LPMI). Some lenders build PMI into a slightly higher rate. This eliminates the separate PMI payment and can be advantageous if you'll stay long-term.
→ Track home appreciation. If your market has risen substantially, a new appraisal may show 20% equity earlier than your payment schedule suggests.
See also: Mortgage Calculator · Down Payment · Home Affordability · Refinance Calculator
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See also: Mortgage Calculator · Home Affordability · Down Payment · Closing Costs · Home Sale Proceeds