PMI, and how to get rid of it
Private mortgage insurance is the price of buying with less than 20% down. It protects the lender if you default, adds nothing to your equity, and exists only until you build enough of a cushion. The good news is that PMI is temporary — and federal law gives you a clear, predictable path to cancelling it. This calculator maps that path, premium by premium.
The cancellation rule
80% LTV → you may request · 78% LTV → lender mustautomatically terminate
Both thresholds are measured against the home’s original value on the original amortization schedule. Because the request point comes first, asking at 80% rather than waiting for 78% trims months of premiums off your total cost.
What makes this calculator different
- Tells you up front whether PMI even applies. Put 20% or more down and the answer is simply “no PMI required” — no insurance, ever.
- The full cancellation timeline. Not just the monthly premium, but both milestones — the 80% point where you can request cancellation and the 78% point where the lender must drop it automatically.
- The dollars you save by being proactive. See exactly how much you keep by requesting cancellation at 80% instead of coasting to automatic termination.
- PMI as its own line item. Most mortgage calculators bury PMI inside the payment. Here it stands alone, so its true lifetime cost is unmistakable.
Frequently asked questions
What is private mortgage insurance (PMI)?+
PMI is an insurance policy that protects the lender — not you — if you stop making payments. Lenders require it whenever you put down less than 20% (a loan-to-value above 80%), because a smaller down payment is riskier for them. You pay the premium, usually folded into your monthly mortgage payment, and it typically runs 0.3% to 1.5% of the original loan amount per year. It adds nothing to your equity; it is a pure cost that exists only until you build enough equity.
How do I avoid PMI?+
The cleanest way is to put down at least 20% of the purchase price, which keeps your loan-to-value at or below 80% from day one — no PMI ever. Other routes include lender-paid PMI (baked into a higher interest rate), a piggyback second loan to cover part of the gap, or VA loans, which carry no PMI for eligible borrowers. This calculator shows immediately whether your down payment clears the 20% threshold.
What is the 80% vs. 78% rule?+
Under the federal Homeowners Protection Act, you have two cancellation milestones, both measured against the home’s original value on the original payment schedule. At 80% loan-to-value you may REQUEST that the lender cancel PMI. At 78% the lender must AUTOMATICALLY terminate it, with no action from you. Because the request point comes first, proactively asking at 80% rather than coasting to 78% saves you several months of premiums — the exact dollar amount is shown above.
Can I cancel PMI early with a reappraisal?+
Often, yes. If your home’s market value has risen, a new appraisal can show you have reached 20% (or more) equity sooner than the original amortization schedule predicts. Many lenders will cancel PMI based on the current appraised value once you have held the loan for a minimum period (commonly two years) and have a clean payment history. You typically pay for the appraisal, but the saved premiums usually dwarf that cost.
How is PMI different from FHA mortgage insurance (MIP)?+
Conventional-loan PMI can be cancelled once you reach 20%–22% equity, and it disappears for good. FHA loans charge a mortgage insurance premium (MIP) that, for most loans originated since 2013 with under 10% down, lasts the entire life of the loan and can only be removed by refinancing into a conventional mortgage. So while an FHA loan may be easier to qualify for, its insurance is far harder to shed — a key reason to compare the total insurance cost, not just the rate.
Disclaimer: This calculator is for educational purposes only. Actual PMI rates, cancellation policies, and reappraisal rules vary by lender, loan type, and jurisdiction. It is not financial or lending advice.