PMI Calculator: Add Private Mortgage Insurance to Your Mortgage Payment

PMI is one of those costs that shows up quietly.

Nobody throws a party for it. Nobody explains it with confetti. It just appears in the mortgage estimate and says, “Hello, I live here now.”

But once you see the math, PMI gets less scary. Not cheaper, sadly. Just less mysterious. And mystery is where bad money choices love to rent space.

Use the embedded mortgage calculator on this page to test your numbers. It includes the parts that matter: home price, down payment, interest rate, taxes, home insurance, and PMI.

Quick answer: PMI can add about $150 a month on a $400,000 home

Here is the simple version.

On a $400,000 home with 10% down, you put down $40,000. That leaves a $360,000 loan.

If your PMI rate is 0.50%, your PMI costs about $1,800 per year. Divide that by 12 months. That is $150 per month.

That $150 is not the whole payment. It sits on top of the mortgage payment, property tax, and home insurance.

With the calculator’s default numbers, the full payment is about $3,210 per month.

That includes about $2,335 for principal and interest, $600 for property tax, $125 for home insurance, and $150 for PMI.

Principal means the money you borrowed. Interest means the lender’s charge for letting you borrow it. Very polite wording for “the bank also eats.”

Use the PMI calculator with taxes and insurance

The fastest way to estimate PMI is to run the full payment.

That matters because buyers often look at only principal and interest. Then the real payment arrives wearing four coats: tax, insurance, PMI, and sometimes HOA dues.

The calculator embed is set up for a realistic example:

• Home price: $400,000
• Down payment: 10%, or $40,000
• Loan amount: $360,000
• Interest rate: 6.75%
• Loan term: 30 years
• Property tax: $7,200 per year
• Home insurance: about $1,500 per year
• PMI rate: 0.50%

Run that first. Then change the down payment to 20%.

That one change removes PMI in many conventional loan estimates. It also lowers the loan from $360,000 to $320,000.

In this example, 10% down gives a payment near $3,210. At 20% down, the payment drops near $2,801.

That is about $409 less per month.

Part of that savings comes from no PMI. Part comes from borrowing $40,000 less.

How much PMI costs at different down payments

PMI depends on your loan size, credit profile, down payment, and lender. But a table helps you see the shape of the cost.

This example uses a $400,000 home, 6.75% interest, $7,200 yearly property tax, $1,500 yearly home insurance, and a 0.50% PMI rate when the down payment is below 20%.

Down payment	Loan amount	Principal & interest	PMI per month	Estimated full payment
3% ($12,000)	$388,000	$2,517	$162	$3,403
5% ($20,000)	$380,000	$2,465	$158	$3,348
10% ($40,000)	$360,000	$2,335	$150	$3,210
15% ($60,000)	$340,000	$2,205	$142	$3,072
20% ($80,000)	$320,000	$2,076	$0	$2,801

The uncomfortable truth is simple.

A smaller down payment can help you buy sooner. It can also raise your monthly payment for years.

That does not make PMI evil. It makes PMI a trade-off. Big difference.

Sometimes paying $150 per month is worth it if home prices are rising or rent is high. Sometimes it is a trap with granite countertops.

The calculator helps you tell which one you are looking at.

How PMI is calculated

PMI stands for private mortgage insurance.

It usually applies to a conventional loan when you put less than 20% down. Conventional means the loan is not backed by a government program like FHA or VA.

PMI protects the lender, not you.

That part feels rude because you pay for it. But the lender gets the protection. Finance has jokes. They are just not very funny.

The simple PMI formula is:

loan amount × PMI rate ÷ 12 = monthly PMI

Using the calculator’s example:

$360,000 × 0.50% ÷ 12 = $150 per month

Your PMI rate may be lower or higher. Many estimates fall around 0.20% to 2.00% per year.

A stronger credit score can help. A larger down payment can help. A lower loan-to-value can help.

Loan-to-value, or LTV, means how much you borrow compared with what the home is worth.

If you buy a $400,000 home and borrow $360,000, your LTV is 90%. You borrowed 90% of the value.

At 80% LTV, many conventional loans can remove PMI.

Why taxes and insurance make the payment feel bigger

A mortgage ad may show a pretty payment.

Then real life adds the rest.

Property tax is what your local government charges based on the home’s value. In this example, it is $7,200 per year, or $600 per month.

Homeowners insurance protects your home from covered damage. In this example, it is about $1,500 per year, or $125 per month.

PMI adds another $150 per month at 10% down.

So a $2,335 principal-and-interest payment becomes about $3,210.

That is why the calculator should include everything. If it does not, it is not showing your house payment. It is showing the house payment’s favorite outfit.

Pretty. Incomplete. Dangerous if you budget from it.

When PMI goes away

PMI is not always forever.

For many conventional loans, you can ask your lender to remove PMI when your loan reaches 80% LTV.

That means your loan balance is about 80% of the home’s original value, or sometimes the current value if your lender allows a new appraisal.

PMI may automatically cancel around 78% LTV if your loan is current.

Current means you are not behind on payments.

Here is the practical version. Do not wait for the lender to be your financial life coach. Set a reminder.

If you buy a $400,000 home, 80% LTV is $320,000. Once your loan balance gets near that number, ask your servicer what it needs to remove PMI.

The servicer is the company that collects your mortgage payment.

They may require a good payment history. They may require an appraisal. They may have rules about loan age.

Ask early. Paperwork moves at the speed of a tired turtle.

How to lower or avoid PMI

You have a few levers.

First, increase your down payment. On the $400,000 example, going from 10% down to 20% down means saving another $40,000.

That is not a small ask. Money does not grow on trees. If it did, banks would own forests.

But it cuts the estimated payment from about $3,210 to $2,801.

Second, improve your credit score before you apply. A better score may lower the PMI rate. Even a small rate change matters on a large loan.

Third, compare lenders. PMI pricing can vary. Two lenders can quote different PMI costs for the same buyer.

Fourth, make extra payments toward principal after closing. Principal is the loan balance. Paying it down faster can help you reach the PMI removal point sooner.

Fifth, if your home value rises, ask whether a new appraisal can help remove PMI. Do not assume. Ask the servicer for its rule.

PMI is not homeowners insurance

This confuses a lot of buyers because both words include “insurance.”

Homeowners insurance protects you from covered damage to the home. Fire, wind, theft, and similar problems may be covered, depending on your policy.

PMI protects the lender if you stop paying the mortgage.

You can pay both at the same time.

On the default calculator example, homeowners insurance is about $125 per month. PMI is about $150 per month.

Together, those two lines add about $275 to the monthly payment.

That is why you want the full number before you fall in love with a kitchen island. Kitchen islands are charming. Monthly payments are less charming when they ambush you.

What to check next

Keep the numbers moving.

• Mortgage Calculator — Run the full payment with taxes, insurance, PMI, and HOA.
• Budget Calculator — Check whether the full payment fits your monthly cash flow.
• Savings Goal Calculator — See how long it would take to save more down payment.

Frequently asked questions

How much is PMI on a $400,000 home?

With 10% down, the loan is $360,000. At a 0.50% PMI rate, PMI is about $150 per month.

At a 1.00% PMI rate, it would be about $300 per month.

That is why your PMI rate matters. Same house. Same down payment. Very different bill.

What is a normal PMI rate?

A common range is about 0.20% to 2.00% of the loan amount per year.

Your rate depends on your down payment, credit score, loan type, and lender.

If your loan is $360,000, a 0.50% PMI rate is $150 per month. A 1.00% rate is $300 per month.

Does PMI go away automatically?

It can.

Many conventional loans automatically cancel PMI around 78% LTV if payments are current.

You may be able to request removal earlier around 80% LTV. Ask your loan servicer for the exact rule.

Is PMI the same as homeowners insurance?

No.

PMI protects the lender. Homeowners insurance protects the home and owner from covered damage.

In the default example, PMI is about $150 per month. Home insurance is about $125 per month.

Do FHA loans have PMI?

FHA loans do not use conventional PMI.

They use mortgage insurance premium, often called MIP. MIP is a similar idea, but the rules are different.

If you have an FHA loan, do not use a PMI estimate as the final answer. Check FHA MIP rules.

Is PMI tax deductible?

Tax rules change. Some years allow deductions for some borrowers. Some years do not.

Use the calculator for payment planning. Ask a tax pro or check current IRS rules before counting on a deduction.

A possible tax break should not be the reason a payment feels affordable.

Is it better to put 20% down or pay PMI?

It depends on the trade-off.

In the $400,000 example, 20% down saves about $409 per month compared with 10% down.

But it also requires another $40,000 upfront.

If saving that takes three years, compare the cost of waiting with the cost of PMI. The right answer is not always “wait.” It is “run the numbers before the numbers run you.”

Can extra payments remove PMI faster?

Yes, extra principal payments can help.

If they lower your loan balance to the lender’s PMI removal point, you may qualify sooner.

Ask your servicer how it handles PMI removal before you send extra money. Rules matter. Annoying, but true.