Put 20% down or more. Or use a piggyback loan (80-10-10): 80% first mortgage, 10% second mortgage, 10% down. VA and USDA loans have no PMI. Or accept lender-paid PMI with a higher interest rate.

Is it better to pay PMI or wait until I have 20% down?

It depends. If home prices are rising 5%+/year, waiting 3 years to save 20% could cost more in appreciation than PMI. Run the numbers: On a $400K home with 5% appreciation, waiting 3 years means the home costs $63K more. PMI for 7 years costs ~$25K. Sometimes PMI is the cheaper option.

Free PMI Calculator 2026

Calculate Private Mortgage Insurance (PMI) costs when you put less than 20% down. See how much PMI adds to your monthly payment.

Home Price

Down Payment

Interest Rate

Credit Score

Loan Term

What Is PMI (Private Mortgage Insurance)?

PMI is insurance you pay to protect the lender if you put less than 20% down on a conventional mortgage. It doesn't protect you — it protects the lender if you default.

PMI is required on conventional loans with less than 20% down. It typically costs $30-70 per month per $100,000 borrowed, or 0.5-1.5% of the loan amount annually.

PMI Rates by Credit Score (2026)

Your credit score has a major impact on your PMI rate:

760+ credit: 0.35-0.45% annual rate ($29-38/month per $100K loan)
740-759 credit: 0.45-0.55% annual ($38-46/month per $100K)
700-739 credit: 0.55-0.75% annual ($46-63/month per $100K)
660-699 credit: 0.75-1.0% annual ($63-83/month per $100K)
620-659 credit: 1.0-1.5% annual ($83-125/month per $100K)

Tip: Raising your credit score from 680 to 740 can cut your PMI in half — saving $50-100/month on a typical loan.

How PMI Affects Your Monthly Payment

On a $400,000 home with 10% down ($360,000 loan):

Principal & Interest (6.5%, 30yr): $2,275/month
PMI (0.7% rate, 700 credit): $210/month
Total: $2,485/month
PMI increases payment by 9.2%

Over 7 years (typical time to reach 78% LTV), you'll pay ~$17,640 in PMI.

When Does PMI Go Away?

Automatic cancellation: When loan balance reaches 78% of original home value (based on amortization schedule)
Request cancellation: When loan balance reaches 80% LTV — you can request early if you've made extra payments or home value increased
Typical timeline: 5-10 years depending on down payment and extra payments
With 5% down: Takes ~9 years to reach 78% LTV with normal payments
With 10% down: Takes ~7 years
With 15% down: Takes ~4 years

Ways to Avoid PMI

Put 20% down — The simplest solution. No PMI, lower monthly payment, better rate
Piggyback loan (80-10-10): 80% first mortgage + 10% HELOC/second + 10% down. Higher total payment but no PMI
Lender-paid PMI: Lender pays PMI in exchange for 0.25-0.5% higher rate. Cannot be cancelled
VA loan: 0% down, no PMI. Only for veterans and active military
USDA loan: 0% down, no PMI (but has a guarantee fee). Only for eligible rural areas
FHA loan: Has MIP (Mortgage Insurance Premium) instead of PMI. Required for the life of the loan if down payment under 10%

PMI vs Waiting to Save 20% Down

Is it better to pay PMI now or wait until you have 20% down?

Scenario A — Pay PMI now: Buy $400K home with 10% down. Pay $210/month PMI for 7 years = $17,640 total PMI cost
Scenario B — Wait 3 years for 20% down: Home appreciates 5%/year = $63K price increase. You saved $17K PMI but paid $63K more for the home. PMI wins by $46K
Scenario C — Wait 3 years, 2% appreciation: Home costs $24K more. PMI cost $17K. Waiting wins by $7K

Rule of thumb: In a market with 4%+ annual appreciation, paying PMI now is usually cheaper than waiting. In slow markets (under 2% appreciation), waiting may be better.

PMI vs MIP vs Funding Fee

PMI: Conventional loans, 0.5-1.5%/year, cancellable at 78-80% LTV
MIP (FHA): 1.75% upfront + 0.55%/year. Required for life of loan if down payment under 10% (or 11 years if 10%+ down)
VA Funding Fee: 2.15-3.3% upfront (can be rolled into loan). No ongoing mortgage insurance
USDA Guarantee Fee: 1% upfront + 0.35%/year. Lower than PMI

Frequently Asked Questions

How much is PMI per month?

PMI costs $30-70 per $100,000 borrowed per month (0.5-1.5% annually). On a $320,000 mortgage, expect $133-400/month. Exact rate depends on credit score, down payment, and loan type.

How can I avoid PMI?

Put 20% down or more. Or use a piggyback loan (80-10-10). VA and USDA loans have no PMI. Or accept lender-paid PMI with a higher rate.

When does PMI go away?

PMI automatically cancels at 78% loan-to-value. You can request cancellation at 80% LTV. Typically takes 5-10 years depending on down payment and extra payments.

Is PMI tax deductible?

PMI was deductible through 2025 for AGI under $109,000. The deduction phases out between $100K-109K AGI. Check current tax law as this provision may be extended.

Is it better to pay PMI or wait for 20% down?

Depends on appreciation. If home prices rise 4%+/year, paying PMI now is usually cheaper (the home costs more later). In slow markets under 2% appreciation, waiting may be better. Run the numbers for your market.