What is PMI on a mortgage?

PMI (Private Mortgage Insurance) is a monthly insurance premium required when your down payment is less than 20% on a conventional mortgage. It protects the lender — not you — if you default. PMI costs 0.2%–2% of the loan amount annually and is added to your monthly payment.

How much does PMI cost per month?

PMI typically costs $30–$70 per month for every $100,000 borrowed, depending on your credit score and down payment. On a $350,000 loan with a 5% down payment, PMI ranges from about $67/month (excellent credit) to $438/month (fair credit).

When does PMI automatically drop off?

By federal law, PMI must be automatically canceled when your loan balance reaches 78% of the original home value, assuming you're current on payments. You can also request cancellation at 80% LTV. For a 5% down payment, this typically takes 9–10 years through normal amortization.

Is FHA MIP the same as conventional PMI?

No. FHA loans use MIP (Mortgage Insurance Premium), not PMI. FHA MIP has different rules: with less than 10% down, MIP lasts the entire loan term and never drops off. With 10%+ down, MIP cancels after 11 years. FHA also charges an upfront premium of 1.75% of the loan amount.

Can I remove PMI without refinancing?

Yes — three ways: (1) Wait for automatic termination at 78% LTV, (2) Request cancellation at 80% LTV with a good payment history, or (3) Get a new appraisal to prove home appreciation has pushed your LTV below 80%. If your home value rose significantly, option 3 can remove PMI years early.

What Is PMI and How to Get Rid of It

PMI (Private Mortgage Insurance) costs $30 to $70 per month for every $100,000 borrowed. On a typical $350,000 loan, that's $105–$245/month — money that protects your lender, not you. Here's exactly how PMI works, what you'll pay based on your credit score, and four proven ways to get rid of it.

What Is PMI and Why Do You Pay It?

PMI is required on conventional loans with less than 20% down. Lenders consider low-down-payment loans riskier, and PMI covers their losses if you default. You pay the premiums, but the lender is the beneficiary.

PMI is calculated as an annual percentage of your loan balance and divided into monthly payments. Rates range from 0.2% to 2.0% annually, with your credit score and down payment being the two biggest factors.

PMI Costs by Credit Score and Down Payment

Here's what you can expect to pay monthly on a $350,000 loan based on your FICO score and down payment:

FICO Score 5% Down 10% Down 15% Down

760+ $67/mo $44/mo $28/mo

720–759 $131/mo $85/mo $52/mo

680–719 $239/mo $155/mo $83/mo

620–679 $438/mo $260/mo $146/mo

The spread is massive: a 760+ FICO borrower with 15% down pays $28/month, while a 620 FICO borrower with 5% down pays $438/month. Over 9 years, that's a $44,000+ difference — all because of credit score and down payment.

4 Ways to Get Rid of PMI

1. Automatic Cancellation at 78% LTV

By law (Homeowners Protection Act), your lender must automatically cancel PMI when your loan balance hits 78% of the original home value. No action required on your part — but you must be current on payments. Timeline: roughly 9–10 years from a 5% down payment.

2. Request Removal at 80% LTV

Don't wait for automatic cancellation. Once your balance reaches 80% LTV, submit a written request to your servicer. You'll need a good payment history and the lender may require an appraisal ($300–$500). This shaves off roughly one year compared to waiting for automatic termination.

3. Refinance Into a Non-PMI Loan

If your home has appreciated and rates are favorable, refinancing into a new loan at 80% LTV or below eliminates PMI entirely. This also works if you have an FHA loan — refinancing into a conventional loan is the only way to remove FHA mortgage insurance permanently.

4. Leverage Home Appreciation With a New Appraisal

If home prices in your area have surged, your current LTV may already be below 80% even though your original loan hasn't hit that threshold. For loans between 2–5 years old, a new appraisal showing sufficient appreciation can trigger PMI removal. Cost: $300–$500 for the appraisal — potentially saving thousands in continued PMI payments.

FHA MIP vs Conventional PMI: Key Differences

Upfront fee: FHA charges 1.75% upfront ($6,125 on a $350K loan). Conventional PMI has no upfront charge.
Duration: FHA MIP with less than 10% down lasts the entire loan term. Conventional PMI drops off automatically.
Removal: The only way to eliminate FHA MIP is to refinance into a conventional loan.

Calculate Your PMI Costs and Removal Date

Don't guess how much PMI costs or when it ends. Enter your loan details in our PMI calculator to see your exact monthly cost, total PMI payments, and the precise month your PMI can be removed — with or without extra payments.

Calculate Your PMI Removal Date →