No, it protects the lender against your default. You pay the premium and the lender receives the benefit, which is why cancelling it as soon as possible is worth the effort.

When does PMI cancel automatically?

At 78 percent loan to value on the original amortisation schedule. You can request cancellation at 80 percent, and doing so is usually worth a phone call.

Finance & LoansmortgageUnited States only

PMI Calculator

Private mortgage insurance cost and when it cancels. PMI protects the lender, not you, and it must be terminated automatically at 78 percent loan to value, though you can request it at 80.

Also called: mortgage insurance calculator, when does pmi drop off.

Monthly PMI

$173.25

$173.25 a month at 90% loan to value. PMI must be cancelled at 78% LTV by law and can be requested at 80%, which arrives in about 95 months on scheduled payments alone, or 34 months allowing for 3% appreciation. Total PMI paid would be $16,458.75. Automatic termination at 78 percent uses the original schedule, so extra payments only help if you request cancellation.

Loan to value

90%

Months to 80% on payments alone

Months to 80% with appreciation

Total PMI paid

$16,458.75

Annual PMI

$2,079.00

Extra payment to reach 80% immediately

$42,000.00

On cancellation

Automatic termination at 78 percent uses the original schedule, so extra payments only help if you request cancellation.

How this is calculated

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

PMI is charged annually as a percentage of the loan balance and paid monthly. Two cancellation points matter: you may request cancellation at 80 percent loan to value based on the original purchase price, and the servicer must terminate it automatically at 78 percent on the original amortisation schedule. Appreciation can get you to 80 percent sooner, but using it requires a new appraisal and the servicer agreeing, where the scheduled route is automatic. Paying the difference as a lump sum is often worth doing where PMI is expensive.

PMI is charged on the loan balance and cancels when the balance falls to 80 percent of the original value

L: Loan balance
V: Home value

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a 10 percent down payment

Home price: $420,000.00
Down payment: $42,000.00
Annual PMI rate: 0.55%
Mortgage rate: 6.5%
Term: 30
Annual appreciation: 3%

Monthly PMI$173.25

378,000 x 0.55%; 378,000 less 336,000

Open this example

twenty percent down needs no PMI

Home price: $420,000.00
Down payment: $84,000.00
Annual PMI rate: 0.55%
Mortgage rate: 6.5%
Term: 30
Annual appreciation: 3%

Monthly PMI$154.00

boundary: already at the cancellation threshold

Open this example

Method and limits

What it assumes

A conventional loan with borrower-paid monthly PMI.

What it deliberately does not model

FHA mortgage insurance follows different rules and often cannot be cancelled at all.
Lender-paid PMI is built into the rate instead and never cancels.
Automatic termination uses the original schedule, so extra payments do not accelerate it without a request.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Does PMI protect me?: No, it protects the lender against your default. You pay the premium and the lender receives the benefit, which is why cancelling it as soon as possible is worth the effort.
When does PMI cancel automatically?: At 78 percent loan to value on the original amortisation schedule. You can request cancellation at 80 percent, and doing so is usually worth a phone call.