Down Payment Calculator · Practical guide
How to Avoid PMI on a Mortgage
PMI quietly adds $100-$200+ a month — here are the four legitimate ways to skip it or shed it early.
At a glance
What PMI Actually Costs
Private mortgage insurance protects the lender, not you, when your down payment is under 20%. This calculator estimates it at 0.5% of the loan per year: about $150 a month on a $360,000 loan — $1,800 a year — for insurance that gives you no direct benefit.
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Down Payment Calculator
Enter your own values, then compare the result with the examples below.
Four Ways to Avoid or Remove PMI
- Put 20% down. The cleanest path: at 20% down the calculator shows PMI as none, and it never enters your payment.
- Wait for 80% loan-to-value. Once your balance drops to 80% of the home's original value, you can request PMI removal in writing. At 78%, federal law generally requires automatic termination on schedule.
- Reappraise after appreciation. If your home's value has risen, a new appraisal may show 20% equity years before the payment schedule would.
- Consider a piggyback or lender-paid structure. An 80-10-10 loan pairs an 80% first mortgage with a 10% second, avoiding PMI at the cost of a second payment; lender-paid PMI trades it for a higher rate.
PMI Cost by Loan Size
| Loan Amount | Est. PMI per Month | Per Year |
|---|---|---|
| $200,000 | $83.33 | $1,000 |
| $300,000 | $125.00 | $1,500 |
| $360,000 | $150.00 | $1,800 |
| $450,000 | $187.50 | $2,250 |
Is Paying PMI Ever the Right Move?
Often, yes. If PMI costs $150 a month but buying now beats three more years of rent increases and price growth, the insurance is simply the price of earlier ownership. Run your scenario above: if the PMI line is small relative to the wait, taking it is a rational choice — just calendar the day you can request removal.
Frequently Asked Questions
When does PMI automatically go away?
Under the Homeowners Protection Act, PMI must generally be terminated automatically when your balance reaches 78% of the home's original value, as long as you are current on payments. You can request removal earlier, at 80%.
Is PMI tax deductible?
The mortgage insurance premium deduction has expired and been extended several times, and its availability depends on current tax law and your income. Check with a tax professional for the year you file.
Is PMI the same as FHA mortgage insurance?
No. FHA loans charge MIP, which works differently: with under 10% down it typically lasts the life of the loan, and removing it usually requires refinancing into a conventional loan.
Does a bigger down payment always eliminate PMI?
At exactly 20% down on a conventional loan, yes. The calculator reflects this: cross the 20% threshold and the PMI line reads none.