PMI Cost Calculator
Private mortgage insurance, usually shortened to PMI, is a premium that protects the lender if a borrower stops paying. It is commonly required on conventional loans when the down payment is under 20 percent, and the cost falls on the borrower even though the coverage protects the lender. Knowing the figure in advance matters, because PMI is an extra line on top of principal, interest, taxes and insurance, and changes what a home costs each month. The math is simple. Multiply the loan by the annual PMI rate for the yearly premium, then divide by twelve for the monthly cost. A 250,000 dollar loan at a 0.5 percent rate works out to 1,250 dollars a year, or about 104.17 dollars a month. This calculator takes the loan amount and the annual PMI rate and returns both the annual and monthly cost so you can budget cleanly. It is a planning tool, not a quote: actual rates depend on loan to value, credit and insurer. Use it to estimate the burden or judge how much a larger down payment could save by removing PMI. Every figure here is computed deterministically from the formula shown below, with a worked example that reconciles exactly to the calculator so you can follow each step.
PMI cost multiplies the loan amount by the annual PMI rate, then divides by twelve for the monthly figure: monthly PMI = rate x loan / 12. A $250,000 loan at a 0.50% annual PMI rate costs $1,250.00 a year, which is about $104.17 a month added to the mortgage payment.
PMI cost formula
Annual PMI = Annual PMI rate x Loan amount
Monthly PMI = Annual PMI / 12
Annual PMI rate is entered as a percent of the loan
A larger down payment can remove the need for PMI
The premium is a flat percentage of the loan balance. Multiply the loan by the annual rate to get the yearly cost, then divide by twelve to spread it across the monthly payments.
Worked example
A borrower has a 250,000 dollar loan and the lender quotes an annual PMI rate of 0.5 percent.
- Annual PMI = 0.005 x 250,000 = 1,250 per year
- Monthly PMI = 1,250 / 12 = 104.17 per month
- The 104.17 dollars is added on top of the regular mortgage payment
The monthly PMI cost is 104.17 dollars. These are the calculator's default inputs, so the result above matches the widget exactly.
PMI cost at common rates
| Annual PMI rate | Annual cost on $250,000 | Monthly cost |
|---|---|---|
| 0.30% | $750.00 | $62.50 |
| 0.50% | $1,250.00 | $104.17 |
| 1.00% | $2,500.00 | $208.33 |
Rates shown are illustrative, not quotes. Your actual PMI rate depends on loan to value, credit and insurer.
PMI cost calculator: frequently asked questions
What is private mortgage insurance?
Private mortgage insurance, or PMI, is a policy that protects the lender if a borrower defaults. It is commonly required on conventional loans when the down payment is less than 20 percent. The borrower pays the premium, usually as a monthly amount added to the mortgage payment.
How is PMI cost calculated?
Multiply the loan amount by the annual PMI rate to get the yearly premium, then divide by twelve for the monthly cost. A 250,000 dollar loan at a 0.5 percent annual PMI rate costs 1,250 dollars a year, or about 104.17 dollars a month.
When can I cancel PMI?
On many conventional loans you can request cancellation once the loan balance reaches 80 percent of the original value, and it is automatically removed at 78 percent under federal rules, subject to conditions. Check your loan terms and servicer requirements for the exact triggers.
What affects the PMI rate?
PMI rates depend mainly on your loan to value ratio and credit profile, and can vary by loan type and insurer. A larger down payment and a stronger credit score generally mean a lower rate. The rate is set as a percentage of the loan balance.
Is PMI the same as homeowners insurance?
No. PMI protects the lender against borrower default and provides no coverage to you. Homeowners insurance protects your property against damage and is a separate policy. Both can appear on a monthly statement, but they serve completely different purposes.
Official sources
- Buying a house, renting and mortgage basics: US Consumer Financial Protection Bureau (CFPB). As at 25 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 25 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.