Enter 80 for 80%, 78 for 78%, etc. (Used to determine PMI cancellation)
Typical range is 0.5% to 1% of the loan amount
Estimated Monthly PMI
$0.00
PMI may be cancellable once your LTV reaches 80%.
Understanding Mortgage PMI
Private Mortgage Insurance (PMI) is a type of mortgage insurance that is required by lenders when you take out a conventional loan and your down payment is less than 20% of the home's purchase price. PMI protects the lender, not you, in case you default on your loan. It essentially covers the difference between the loan amount and the home's value if the lender has to foreclose.
How is PMI Calculated?
The monthly PMI payment is typically calculated as a percentage of the original loan amount, multiplied by an annual rate, and then divided by 12 to get the monthly cost. The annual PMI rate varies based on several factors, including your credit score, the loan-to-value (LTV) ratio, and the loan term. Rates commonly range from 0.5% to 1% of the loan amount annually.
For example, if your original loan amount is $300,000 and your annual PMI rate is 0.75%, your estimated monthly PMI would be:
($300,000 * 0.0075) / 12 = $2250 / 12 = $187.50
When Can You Cancel PMI?
For conventional loans, you typically have the right to request cancellation of PMI when your Loan-to-Value (LTV) ratio reaches 80% of the original appraised value of your home. Furthermore, lenders are required to automatically terminate PMI when your LTV ratio reaches 78% of the original appraised value.
The LTV ratio is calculated as:
LTV Ratio = (Current Loan Balance / Current Home Value) * 100
In this calculator, we use the Current Home Value and the Original Loan Amount to help estimate when your LTV ratio might fall below the cancellation thresholds, assuming your loan balance has decreased proportionately with home equity.
Important Note: This calculator provides an estimate. Your actual PMI costs and cancellation terms may vary based on your specific lender and loan agreement. Consult your mortgage provider for precise details.
function calculatePMI() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var homeValue = parseFloat(document.getElementById("homeValue").value);
var ltvRatioInput = parseFloat(document.getElementById("ltvRatio").value);
var annualPmiRate = parseFloat(document.getElementById("annualPmiRate").value);
var pmiAmountElement = document.getElementById("pmiAmount");
var pmiCancellationInfoElement = document.getElementById("pmiCancellationInfo");
// Clear previous results
pmiAmountElement.textContent = "$0.00";
pmiCancellationInfoElement.textContent = "";
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(homeValue) || homeValue <= 0 ||
isNaN(ltvRatioInput) || ltvRatioInput <= 0 ||
isNaN(annualPmiRate) || annualPmiRate < 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Calculate Monthly PMI
var annualPmiRateDecimal = annualPmiRate / 100;
var monthlyPmi = (loanAmount * annualPmiRateDecimal) / 12;
// Display Monthly PMI
pmiAmountElement.textContent = "$" + monthlyPmi.toFixed(2);
// Determine PMI Cancellation Information
var cancellationMessage = "PMI may be cancellable once your LTV reaches 80%. For automatic cancellation, your LTV typically needs to be 78%.";
if (ltvRatioInput <= 80) {
cancellationMessage = "Your current LTV is " + ltvRatioInput.toFixed(1) + "%. You may be eligible to cancel PMI. Contact your lender.";
} else if (ltvRatioInput <= 78) {
cancellationMessage = "Your current LTV is " + ltvRatioInput.toFixed(1) + "%. PMI should be automatically canceled by your lender.";
} else {
cancellationMessage = "Your current LTV is " + ltvRatioInput.toFixed(1) + "%. PMI is likely still required. Continue making payments and reducing your loan balance.";
}
pmiCancellationInfoElement.textContent = cancellationMessage;
}