PMI Calculator — See Exactly When Yours Drops Off

What PMI costs, and what moves the rate

PMI is priced as an annual percentage of the loan amount and divided into twelve. The premium band runs roughly 0.5% to 1.5% a year, and where you land inside it is decided by two things: your credit score and how much you put down. A borrower with a 780 score putting 15% down sits near the bottom of the range; a 660 score at 3% down sits near the top.

Two hundred and twenty-five dollars a month is not a rounding error; it is most of a car payment, and it buys you nothing you can keep. That is the case for treating PMI as a temporary condition to be exited rather than a permanent line in the budget.

Getting rid of it: the three legal triggers

Conventional PMI is governed by the federal Homeowners Protection Act, which gives you three separate routes out. All three are measured against the original value of the home, not today's value.

1. Request at 80%. Once the balance is scheduled to reach 80% of original value you can ask in writing. The servicer must comply if you are current on payments, have no junior liens, and the value has not declined.
2. Automatic at 78%. Your servicer must terminate PMI on the date the balance is scheduled to hit 78%, with no request needed, provided you are current.
3. The midpoint rule. PMI must end the month after the halfway point of the original term — year 15 of a 30-year loan — even if neither threshold has been reached.

Being current matters in all three cases: if payments are behind, termination waits until you catch up. Fannie Mae and Freddie Mac may allow more generous treatment based on a current appraisal, but never less than the law requires — which is why calling your servicer to ask about their appreciation-based option is usually worth one phone call.

Why FHA mortgage insurance is a different animal

FHA loans do not carry PMI; they carry MIP, and the rules are not the same. FHA charges an upfront premium of 1.75% of the loan plus an annual premium — commonly 0.55% — and when you put less than 10% down that annual premium lasts the life of the loan. There is no 78% trigger. The only exit is refinancing into a conventional loan once you have the equity.

This is the whole FHA-versus-conventional calculation for many buyers: FHA is more forgiving at approval, conventional is cheaper to escape. Run both with the FHA vs Conventional Calculator before assuming the lower down payment is the cheaper loan.

Is avoiding PMI worth it?

Not always. Waiting to reach 20% means paying rent for longer while prices and rates move on their own schedule, and draining every account to hit the threshold leaves nothing for the repairs that arrive with ownership. The median first-time buyer put down 10% (NAR, 2025 Profile of Home Buyers and Sellers) and paid PMI to get in.

• ·Piggyback loans (80/10/10) avoid PMI with a second lien, at the cost of a higher second-lien rate — do the arithmetic, not the vibe.
• ·Lender-paid PMI buries the premium in a higher rate that never cancels. Cheaper monthly, more expensive over time.
• ·Paying to 20% at closing is right when the cash exists after reserves — and wrong when it empties the emergency fund.

The practical middle path most buyers take: put down what you can, keep three to six months of expenses liquid, and treat PMI as a fee for starting earlier — then cancel it the month you are entitled to. Set a calendar reminder for the month your amortization schedule reaches 80%; almost nobody does, and that is how people pay PMI for years longer than the law requires.

The month-by-month path out

Because PMI cancellation is tied to your amortization schedule, the date is knowable in advance — and almost nobody looks it up. On a 30-year loan at 6.58% with 10% down, the balance crosses 80% of original value somewhere in year eight or nine on scheduled payments alone. That is the month you are entitled to ask.

1. Find the month. Run your loan through the amortization schedule and mark the month the balance hits 80% of the original purchase price. Put it in your calendar now.
2. Send a written request. The Homeowners Protection Act requires the request to be in writing. Confirm you are current, have no second lien, and ask what evidence of value they require.
3. Ask about appreciation separately. Fannie Mae and Freddie Mac permit cancellation based on a current appraised value under their own seasoning rules — a different route from the federal one, and often much faster in a market that has risen.
4. Do not assume it happened. Check the statement. Automatic termination at 78% is the servicer's legal obligation, and it is still worth verifying it actually occurred.

Paying extra principal to get there sooner

Extra principal payments pull the 80% date forward, and while the balance is high the leverage is real: every dollar of extra principal is a dollar less balance, permanently. On a $360,000 loan carrying PMI at 0.85%, cancelling a year early is roughly $3,060 that stays in your pocket — often a better return than the same money earns anywhere else that year.

The trade-off is liquidity. Money sent to principal is gone until you sell or borrow it back, so the sequence most owners should follow is: emergency fund first, then extra principal to reach 80%, then everything else. Model both with the Early Mortgage Payoff Calculator, which shows how a fixed monthly extra moves the balance curve.

Refinancing purely to escape PMI rarely pays on its own. You would be swapping a temporary premium for a permanent set of closing costs — see the break-even math before treating it as a solution.

What PMI is not

Two misunderstandings cost people real money. The first: PMI does not protect you. If you default, it pays the lender — you still lose the home and the credit score. It is a fee you pay for someone else's insurance, which is exactly why it is worth cancelling the month you are entitled to rather than treating it as part of the payment.

The second: not every low-down-payment loan carries PMI. VA loans have no monthly mortgage insurance at all — they charge a one-time funding fee of 1.25%–2.15% on a first-use purchase depending on the down payment, with exemptions for borrowers receiving compensation for a service-connected disability. USDA loans charge 1.0% upfront and 0.35% annually, which is cheaper than most conventional PMI and cheaper than FHA. If you are eligible for either, the mortgage insurance comparison alone can outweigh a small difference in rate.

• ·VA Mortgage Calculator — 0% down with no monthly mortgage insurance.
• ·FHA vs Conventional Calculator — the MIP-versus-PMI comparison over your actual holding period.
• ·First-time buyer FAQ — where PMI sits among everything else you pay.