Mortgage Insurance Calculator

How it works

Mortgage insurance protects the lender, not you, when you borrow most of the price. Each program charges for it differently. A conventional loan with less than 20% down carries private mortgage insurance (PMI), quoted as a yearly percentage of the loan and paid monthly. Under the Homeowners Protection Act of 1998 it must end automatically when the balance is scheduled to reach 78% of the home's original value, or at the loan's midpoint if that comes first.

An FHA loan charges an upfront mortgage insurance premium, normally financed into the loan, plus an annual premium paid monthly. Under HUD Mortgagee Letter 2023-05 the annual premium lasts 11 years if you put 10% or more down and the whole term otherwise. This calculator charges each year's premium on that year's average scheduled balance, leaving out the financed upfront premium as the National Housing Act requires, so it falls slowly as you pay the loan down. FHA requires at least 3.5% down (10% with a credit score of 500 to 579), so smaller down payments are rejected.

A VA loan has no monthly insurance. Instead the VA charges a one-time funding fee, usually financed. Veterans receiving VA disability compensation and some others are exempt; set the fee to 0 if that is you.

Formula

base loan = price × (1 − down % ÷ 100)        LTV = base loan ÷ price
Conventional: PMI = base loan × PMI rate ÷ 12, when base loan > 80% × price
  ends after the first payment k with balance_k ≤ 78% × price (k ≤ n ÷ 2)
FHA: upfront = base loan × 1.75%;  loan = base loan + upfront
  monthly MIP in year y = annual rate × average balance in year y × (base loan ÷ loan) ÷ 12
  paid for n months if base loan > 90% × price, else 132 months (11 years)
VA: funding fee = base loan × fee %;  loan = base loan + fee
balance_k = P&I × (1 − (1 + r)^−(n − k)) ÷ r     (the payments still due; rate up to 50%)

Example

A conventional $360,000 loan on a $400,000 home (10% down) at 6.5% for 30 years, with PMI at 0.5% a year: PMI is $150.00 a month. The scheduled balance first reaches 78% of $400,000 ($312,000) at payment 109, in year 10, so PMI costs $16,350.00 in total.

The same home as an FHA loan with 3.5% down is a $386,000 base loan. The 1.75% upfront premium of $6,755.00 is financed, for a $392,755.00 loan and a principal-and-interest payment of $2,482.48. The first year's annual premium at 0.55%, charged on the balance excluding the financed premium, is $176.02 a month; because less than 10% was put down it runs for all 30 years, for $48,412.99 of insurance in total.

Assumptions and limitations

• PMI rates are typical figures; your rate depends on your credit score, loan-to-value and the insurer. Borrower-paid monthly PMI is modelled; single-premium and lender-paid PMI are not.
• Automatic PMI termination follows the original amortization schedule and assumes you are current on payments. You can ask to cancel at 80% of the original value, sooner than the automatic 78% shown here, and extra payments or a new appraisal can bring that forward. The price is taken as the original value.
• FHA rates are from HUD Mortgagee Letter 2023-05, still in effect in 2026. The 0.55% annual default applies only to terms over 15 years with a base loan up to $726,200 and less than 5% down; for any other loan, including every term of 15 years or less (0.15% to 0.65%), you must change it. The annual premium is computed on each year's scheduled average balance excluding the financed upfront premium (12 U.S.C. 1709(c)(2)(B)), so a lender's exact figure may differ slightly.
• VA fee defaults follow the VA schedule effective April 7, 2023. All rates are editable if the rules change.
• The rate is fixed and payments are monthly. Interest on a financed premium is reflected in the principal-and-interest payment, not in the insurance total.
• This is an estimate for planning, not financial, tax or legal advice.

Frequently asked questions