PMI Calculator

Private Mortgage Insurance (PMI) protects the lender (not you) if you default on a loan with less than 20% down. It typically costs 0.5-1.5% of the loan amount annually. On a $320,000 loan at 0.8% PMI, that is $2,560/year ($213/month).

By law (Homeowners Protection Act), you can request PMI cancellation when your loan-to-value ratio reaches 80% (20% equity). Lenders must automatically cancel it at 78% LTV based on original value. You can also refinance once you have 20% equity.

Make extra principal payments to reach 80% LTV sooner. Pay for a new appraisal once your home appreciates — if the current LTV is under 80% of current value, you can request cancellation. Some lenders accept appreciation within 2+ years of ownership.

PMI deductibility has varied by tax year and income level. Check the current IRS guidelines — it was deductible for eligible taxpayers through 2021 and has been extended at various times. Consult a tax professional for your specific situation.

An 80/10/10 loan: 80% first mortgage, 10% second mortgage (home equity loan), and 10% down payment. This avoids PMI entirely. The second mortgage typically has a higher rate, but may cost less than PMI over time if rates are favorable.