PMI added to each payment
$174.00
Enter the purchase price, the down payment and the rate. The calculator reports the three dates on which private mortgage insurance can end, and which of them an extra principal payment actually moves.
The two balance columns are identical until an extra monthly principal is entered. The statutory dates are those in the Homeowners Protection Act and apply to borrower-paid mortgage insurance on a conventional first mortgage for a principal residence: lender-paid insurance is excluded from the Act, and FHA mortgage insurance follows a separate set of rules that runs for a fixed period or, on some loans, for the life of the loan. A down payment of 20% or more needs no PMI on a conventional loan and the calculator returns zero. PMI is charged monthly at the stated annual rate on the original loan amount, which is how insurers commonly price it; a servicer charging on the declining balance would produce a slightly smaller total. The property value used throughout is the value at origination, because that is what the statute measures the thresholds against.
| Year | Balance on schedule | LTV on schedule | Balance you will have | Your LTV |
|---|---|---|---|---|
| Year 1 | $356,616 | 89.2% | $356,616 | 89.2% |
| Year 2 | $352,973 | 88.2% | $352,973 | 88.2% |
| Year 3 | $349,051 | 87.3% | $349,051 | 87.3% |
| Year 4 | $344,828 | 86.2% | $344,828 | 86.2% |
| Year 5 | $340,283 | 85.1% | $340,283 | 85.1% |
| Year 6 | $335,389 | 83.8% | $335,389 | 83.8% |
| Year 7 | $330,121 | 82.5% | $330,121 | 82.5% |
| Year 8 | $324,449 | 81.1% | $324,449 | 81.1% |
| Year 9 | $318,343 | 79.6% | $318,343 | 79.6% |
| Year 10 | $311,770 | 77.9% | $311,770 | 77.9% |
| Year 11 | $304,693 | 76.2% | $304,693 | 76.2% |
| Year 12 | $297,075 | 74.3% | $297,075 | 74.3% |
| Year 13 | $288,873 | 72.2% | $288,873 | 72.2% |
| Year 14 | $280,043 | 70.0% | $280,043 | 70.0% |
| Year 15 | $270,538 | 67.6% | $270,538 | 67.6% |
| Year 16 | $260,304 | 65.1% | $260,304 | 65.1% |
| Year 17 | $249,287 | 62.3% | $249,287 | 62.3% |
| Year 18 | $237,427 | 59.4% | $237,427 | 59.4% |
| Year 19 | $224,658 | 56.2% | $224,658 | 56.2% |
| Year 20 | $210,912 | 52.7% | $210,912 | 52.7% |
| Year 21 | $196,113 | 49.0% | $196,113 | 49.0% |
| Year 22 | $180,182 | 45.0% | $180,182 | 45.0% |
| Year 23 | $163,030 | 40.8% | $163,030 | 40.8% |
| Year 24 | $144,566 | 36.1% | $144,566 | 36.1% |
| Year 25 | $124,688 | 31.2% | $124,688 | 31.2% |
| Year 26 | $103,288 | 25.8% | $103,288 | 25.8% |
| Year 27 | $80,249 | 20.1% | $80,249 | 20.1% |
| Year 28 | $55,447 | 13.9% | $55,447 | 13.9% |
| Year 29 | $28,746 | 7.2% | $28,746 | 7.2% |
| Year 30 | $0 | 0.0% | $0 | 0.0% |
Private mortgage insurance does not end on a date the lender picks. The Homeowners Protection Act, in force since 1999 for loans on a principal residence, sets three separate dates, and they are not calculated against the same thing. One is a right the borrower must exercise, one happens on its own, and one is a long-stop that only matters when the first two have not arrived.
The automatic termination date is defined against the original amortisation schedule irrespective of the outstanding balance, and that clause is the one most summaries leave out. A borrower who pays the loan down faster does not reach 78% of the original value any sooner under this provision, because the provision is not looking at the balance. It is looking at the schedule that was drawn up at closing.
On the default figures above the distinction is exact. Extra principal of $500 a month brings the balance to 80% of the original value in month 46 rather than month 105, which is 59 months earlier. The automatic date stays at month 120 either way.
| Year | Balance on schedule | LTV on schedule | Balance with $500 extra | LTV with extra |
|---|---|---|---|---|
| Year 3 | $349,051 | 87.3% | $328,965 | 82.2% |
| Year 5 | $340,283 | 85.1% | $304,113 | 76.0% |
| Year 8 | $324,449 | 81.1% | $259,234 | 64.8% |
| Year 10 | $311,770 | 77.9% | $223,296 | 55.8% |
The default $400,000 purchase with 10% down, with and without $500 a month of extra principal
What extra principal buys, then, is the right to ask earlier. That is worth something and it is worth less than the sum usually implied. Pulling the request date from month 105 to month 46 is 59 months of premiums not paid, which is $10,266. Measured against taking no action at all, the earlier request plus the extra principal together avoid $12,876 of the $20,880 that the original schedule would have collected.
The 80% date is a right to ask rather than a date the servicer must act on by itself, and the conditions attached to it are where the two routes genuinely diverge.
The value test is the one that catches people, because it is the only condition that can fail through no fault of the borrower. A household that bought near a local peak can be current and have paid on time for a decade and still be refused, because the property rather than the borrower has to satisfy the test. The automatic route contains no equivalent clause, which is the trade the statute makes: the automatic date cannot be argued with, and it cannot be hurried.
There is one piece of housekeeping in the borrower's favour. Once coverage is cancelled or terminated the servicer may not bill for premiums more than 30 days after the later of the request and the satisfaction of the evidence requirements, and any unearned premium must be returned within 45 days. Borrowers who reach the threshold and never write the letter keep paying until month 120, and nothing sends the money back.
The midpoint backstop ends mortgage insurance at the halfway point of the amortisation period, and it is the one provision that does not depend on the loan-to-value ratio at all. On a 30-year loan it arrives at month 180 whatever the balance happens to be.
Summaries often present it as a routine second route, and on ordinary loans it almost never is. At the default rate of 7.40% the balance on a 30-year schedule reaches 78% of the original value in month 168 even from a starting loan-to-value of 100%, comfortably before month 180. The backstop starts to bind only when scheduled principal repayment is slow enough to push the 78% date past the midpoint, which takes a much higher rate: at 10% a 30-year loan at 97% loan-to-value reaches month 180 with the balance still above 78%.
The other thing the backstop does not do is rescue a borrower whose property value has fallen. Every threshold in the Act is measured against the value at origination, so a rising market does not bring cancellation forward and a falling one does not hold it back. A lender may, as a matter of its own policy rather than of statutory duty, accept a current appraisal and cancel earlier; some do. That is discretion, it is not uniform, and it is not what this calculator models.
Take the default figures: a $400,000 purchase with $40,000 down, which is a loan of $360,000 and a loan-to-value ratio of 90%. At an annual premium of 0.58% the monthly charge is $360,000 × 0.58 ÷ 100 ÷ 12 = $174.00.
The two thresholds in dollars are 80% of $400,000 = $320,000 and 78% of $400,000 = $312,000, which are $8,000 apart. On the schedule the balance crosses the first in month 105 and the second in month 120, so the two dates are 15 months apart. Asking at the earliest permitted moment saves 15 × $174.00 = $2,610.
Doing nothing at all ends coverage in month 120 and costs 120 × $174.00 = $20,880. That is the larger number on this page and it is not a timing problem: it is what a 10% down payment costs over ten years. The timing decision is worth $2,610 of it.
A few cents of disagreement with your own working is the rounding order. More than that means one of the two implementations is wrong, and the corrections page explains how to report it.
Private mortgage insurance on a conventional first mortgage must be terminated automatically when the balance is first scheduled to reach 78% of the value of the property at origination, based on the original amortisation schedule and irrespective of the outstanding balance. On the default figures here that is month 120, or ten years in. The servicer does not test payment history on this route and cannot raise the value of the property as an objection; it only requires that the borrower be current when the date arrives.
Extra principal moves the 80% request date and leaves the 78% automatic date untouched. On the default figures, $500 a month brings the balance to 80% of the original value in month 46 instead of month 105, a difference of 59 months of premiums, $10,266. The automatic date stays at month 120 because the statute measures it against the original schedule rather than the balance, so a borrower who pays ahead and never writes to the servicer receives nothing extra for the money.
A higher home value does not shorten the statutory schedule, because every threshold in the Homeowners Protection Act is measured against the value of the property at origination rather than a later market value. A lender may accept a current appraisal and cancel earlier as its own policy, and many do, but that is discretion rather than a right and it is not uniform between servicers. A falling market works in the opposite direction and can block cancellation on the request route, which is the one condition a borrower cannot cure by paying on time.
The midpoint backstop ends mortgage insurance at halfway through the amortisation period, month 180 on a 30-year loan, whatever the balance is. It matters when scheduled principal repayment is slow enough that the 78% threshold has not been reached by then. At the default rate of 7.40% the 78% date arrives first even from 100% loan-to-value, so the backstop is inactive on ordinary loans and begins to bind only at much higher rates or on longer terms.
FHA mortgage insurance follows a separate set of rules and is not governed by the Homeowners Protection Act's cancellation provisions. It carries an upfront premium as well as an annual one, and how long the annual premium lasts depends on the loan-to-value ratio and the year the loan was made, with some FHA borrowers paying it for the life of the loan. The Act also excludes lender-paid mortgage insurance, which by construction cannot be cancelled by the borrower because the borrower is not the one paying it.
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Cluster us/mortgage · Unit us-mortgage-pmi-removal-calculator · Engine amortizing-loan / pmi · Method: The loan balance is amortised monthly at the stated rate, once on the original schedule with no extra principal and once more with the extra monthly amount. Each statutory threshold is tested against the balance series the statute points to: the 78% automatic date against the original schedule alone, the 80% request date against actual payments. The backstop is half the scheduled number of payments. PMI is charged monthly at the stated annual rate on the original loan amount.