National MI (Private Mortgage Insurance) is a specialized financial product required by lenders when a borrower provides a down payment of less than 20% on a conventional home loan. Unlike government-backed insurance (like FHA), National MI rates are risk-based, meaning they change based on your specific financial profile.
The calculation is primarily driven by three factors: your Loan-to-Value (LTV) ratio, your Credit Score, and the Coverage Percentage required by the investor (Fannie Mae or Freddie Mac). Higher credit scores and lower LTV ratios generally result in significantly lower monthly premiums.
Key Factors in Your Premium
LTV Ratio: This is the loan amount divided by the property value. The higher the LTV, the higher the risk for the insurer. Most MI is required for LTVs above 80%.
Credit Score: Borrowers with scores above 760 often receive the "Preferred" rate tiers, which can be less than half the cost of rates for scores in the low 600s.
Loan Amount: Because MI is calculated as a percentage (basis points) of the loan balance, higher loan amounts lead to higher dollar premiums even if the rate is the same.
Example MI Calculation
Suppose you are purchasing a home with a $400,000 loan and a 95% LTV. If your credit score is 740, your annual rate might be approximately 0.56%.
Calculation: 400,000 x 0.0056 = $2,240 per year.
Monthly: $2,240 / 12 = $186.67 per month.
function calculateNationalMI() {
var loanAmount = parseFloat(document.getElementById("miLoanAmount").value);
var ltv = parseFloat(document.getElementById("miLTV").value);
var fico = parseInt(document.getElementById("miCreditScore").value);
var coverage = parseInt(document.getElementById("miCoverage").value);
var resultBox = document.getElementById("miResultBox");
if (isNaN(loanAmount) || isNaN(ltv) || loanAmount <= 0 || ltv 95) {
if (fico >= 760) baseRate = 0.58;
else if (fico >= 740) baseRate = 0.70;
else if (fico >= 720) baseRate = 0.87;
else if (fico >= 700) baseRate = 0.99;
else if (fico >= 680) baseRate = 1.21;
else if (fico >= 660) baseRate = 1.54;
else if (fico >= 640) baseRate = 1.70;
else baseRate = 1.85;
} else if (ltv > 90) {
if (fico >= 760) baseRate = 0.41;
else if (fico >= 740) baseRate = 0.52;
else if (fico >= 720) baseRate = 0.64;
else if (fico >= 700) baseRate = 0.75;
else if (fico >= 680) baseRate = 0.92;
else if (fico >= 660) baseRate = 1.21;
else if (fico >= 640) baseRate = 1.35;
else baseRate = 1.50;
} else if (ltv > 85) {
if (fico >= 760) baseRate = 0.30;
else if (fico >= 740) baseRate = 0.38;
else if (fico >= 720) baseRate = 0.44;
else if (fico >= 700) baseRate = 0.52;
else if (fico >= 680) baseRate = 0.62;
else if (fico >= 660) baseRate = 0.85;
else if (fico >= 640) baseRate = 0.95;
else baseRate = 1.10;
} else {
if (fico >= 760) baseRate = 0.19;
else if (fico >= 740) baseRate = 0.23;
else if (fico >= 720) baseRate = 0.27;
else if (fico >= 700) baseRate = 0.32;
else if (fico >= 680) baseRate = 0.41;
else if (fico >= 660) baseRate = 0.54;
else if (fico >= 640) baseRate = 0.60;
else baseRate = 0.75;
}
// Coverage Adjustment factor
// Standard rates usually assume 30% coverage for 95% LTV.
// If coverage selected is lower than standard for that LTV, we adjust.
var coverageAdjustment = 1.0;
if (ltv > 95 && coverage < 35) coverageAdjustment = 0.85;
if (ltv 25) coverageAdjustment = 1.15;
var finalAnnualRate = baseRate * coverageAdjustment;
var annualPremium = (loanAmount * (finalAnnualRate / 100));
var monthlyPremium = annualPremium / 12;
document.getElementById("resAnnualRate").innerText = finalAnnualRate.toFixed(3) + "%";
document.getElementById("resAnnualPremium").innerText = "$" + annualPremium.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resMonthlyPremium").innerText = "$" + monthlyPremium.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultBox.style.display = "block";
}