Mortgage Payment With PMI
When your down payment is under 20%, lenders usually add private mortgage insurance. Set a lower down payment below to see the effect.
| Component | Monthly |
|---|---|
| Principal & interest | — |
| Property tax | — |
| Home insurance | — |
What is PMI?
Private mortgage insurance protects the lender if you put down less than 20% on a conventional loan. It's an extra monthly cost — typically 0.3% to 1.5% of the loan amount per year — added on top of principal, interest, taxes, and insurance. The calculator above is preset to a 10% down payment to reflect a common PMI scenario; raising the down payment to 20% in the field removes the need for PMI.
How to avoid or remove PMI
The simplest way to avoid PMI is a 20% down payment. If you already have a loan with PMI, you can usually request its removal once your loan balance falls to 80% of the home's original value, and it typically drops off automatically at 78%. Rising home values can also help you reach that threshold sooner.
Is PMI always bad?
Not necessarily. PMI lets you buy sooner with a smaller down payment, which can make sense in a rising market or when waiting to save 20% would cost more in rent and missed appreciation. Weigh the monthly PMI cost against the benefit of buying now.
PMI cost by down payment size
PMI rates scale with how much equity you're starting with — the less you put down, the higher the PMI rate a lender typically charges, on top of a larger loan balance. On a $350,000 home at 6.5%:
| Down payment | Loan amount | Est. PMI rate | Monthly PMI |
|---|---|---|---|
| 3% ($10,500) | $339.5K | ~1.0%/yr | ~$283/mo |
| 5% ($17,500) | $332.5K | ~0.85%/yr | ~$236/mo |
| 10% ($35,000) | $315K | ~0.6%/yr | ~$158/mo |
| 15% ($52,500) | $297.5K | ~0.4%/yr | ~$99/mo |
| 20% ($70,000) | $280K | None | $0/mo |
These are typical estimates — your actual PMI rate also depends on your credit score and loan type. Borrowers with excellent credit generally get the lowest end of the PMI range; a lower credit score can push the rate toward the higher end even at the same down payment.
Common questions
Can I cancel PMI once I have it?
Yes. Under the federal Homeowners Protection Act, lenders must automatically cancel PMI once your loan balance reaches 78% of the home's original value, as long as you're current on payments. You can also request cancellation yourself once you hit 80%, though the lender may require an appraisal to confirm your home's current value first.
Is PMI the same as homeowners insurance?
No — they're unrelated. Homeowners insurance protects you against damage to your home and belongings. PMI protects the lender if you default on the loan. Both are usually paid monthly as part of your total mortgage payment, which is why the calculator above breaks them out separately.