PMI Calculation Formula
Calculate monthly private mortgage insurance with one formula: loan amount x annual PMI rate / 12. Use the worksheet below for quick estimates, then run the full calculator for taxes, insurance, HOA, DTI, and PMI removal timing.
Loan amount x PMI rate / 12
Example: $300,000 x 0.58% / 12 = $145 per month.
Loan amount x PMI rate
Example: $300,000 x 0.58% = $1,740 per year.
Original value x 80% or 78%
CFPB explains many borrowers can request cancellation at 80% and generally receive automatic termination at scheduled 78% if current.
PMI Calculation Examples
| Loan amount | Annual PMI rate | Monthly PMI | Annual PMI | Use case |
|---|---|---|---|---|
| $250,000 | 0.30% | $63 | $750 | Strong credit and lower LTV planning example. |
| $300,000 | 0.58% | $145 | $1,740 | Common mid-band example for PMI calculation searches. |
| $360,000 | 0.58% | $174 | $2,088 | $400,000 home with 10% down in the planning model. |
| $380,000 | 0.78% | $247 | $2,964 | $400,000 home with 5% down and 700-719 score band. |
| $400,000 | 1.15% | $383 | $4,600 | Higher-risk LTV or credit profile planning example. |
How to pick the PMI rate
The PMI rate is not the mortgage interest rate. It is an annual insurance rate, usually driven by credit score, loan-to-value ratio, loan term, occupancy, property type, debt-to-income ratio, and insurer pricing.
If you do not have a lender quote yet, use a planning range. Strong-credit borrowers at lower LTV may model below 0.50%; higher-LTV or lower-credit scenarios can move above 1.00%.
Worked $400,000 home example
Home price: $400,000. Down payment: 5%. Loan amount: $380,000. If the annual PMI rate is 0.78%, the calculation is:
PMI Rate Planning Bands
| Starting LTV | Strong credit planning range | Mid credit planning range | Lower credit planning point |
|---|---|---|---|
| 80.01%-85% | 0.19%-0.39% | 0.48%-0.78% | 0.98% |
| 85.01%-90% | 0.30%-0.58% | 0.72%-1.15% | 1.42% |
| 90.01%-95% | 0.41%-0.78% | 0.96%-1.50% | 1.86% |
| 95.01%-97% | 0.55%-0.95% | 1.15%-1.78% | 2.25% |
These are planning bands used by Amortio's calculator, not insurer rate-card quotes. Your lender can quote a different PMI rate after underwriting.
PMI Cancellation Calculation
CFPB says many borrowers can request PMI cancellation when the principal balance is scheduled to reach 80% of original home value, and automatic termination generally occurs when the balance is scheduled to reach 78% if the borrower is current. The basic targets are simple:
| Original home value | 80% request target | 78% auto target | 20% equity amount |
|---|---|---|---|
| $300,000 | $240,000 | $234,000 | $60,000 |
| $400,000 | $320,000 | $312,000 | $80,000 |
| $500,000 | $400,000 | $390,000 | $100,000 |
Common PMI calculation mistakes
- Using home price instead of loan amount in the monthly PMI formula.
- Forgetting to divide the annual PMI cost by 12.
- Assuming FHA MIP uses the same cancellation rules as conventional borrower-paid PMI.
- Using current market value when the servicer is applying an original-value cancellation rule.
- Treating a lender-paid mortgage insurance rate adjustment as removable monthly PMI.
Source-backed assumptions
CFPB defines PMI as lender protection and notes it is often required when a conventional down payment is below 20%. CFPB also describes the 80% request and 78% automatic termination framework. HUD's FHA materials separate FHA MIP from conventional PMI and list upfront/annual MIP rules.
Calculate your full mortgage payment next
The formula gives the PMI line item. The real affordability question is principal, interest, taxes, insurance, HOA, PMI, and debt-to-income ratio together.