How long you keep PMI changes which quote costs less
A buyer receives two quotes for the same conventional mortgage. Quote A has no upfront PMI and costs $95 per month. Quote B charges $1,500 at closing and $45 per month. Assume each monthly price stays fixed and the upfront premium is paid in cash.
| Months charged | Quote A | Quote B |
|---|---|---|
| 24 | $2,280 | $2,580 |
| 30 | $2,850 | $2,850 |
| 60 | $5,700 | $4,200 |
The $50 monthly saving on B takes 30 payments to recover its extra $1,500 at closing. If the household moves after 24 PMI payments, A costs $300 less before any refund. If PMI stays in force for 60 payments, B costs $1,500 less. The upfront premium’s refund terms come from the lender. CFPB guide to PMI payment options
Where to find your mortgage insurance cost
Use the monthly mortgage insurance amount in the Projected Payments section on page 1 of the Loan Estimate or Closing Disclosure. Look on page 2, section B, for an upfront PMI charge. Enter only the PMI line, rather than taxes, homeowners insurance or the full escrow payment. Mortgage insurance protects the lender if a borrower defaults. Use the home insurance calculator for the building and belongings. CFPB annotated Loan Estimate
If a lender quotes a percentage, ask which balance it applies to, how often it changes and what monthly dollar amount will appear in the payment schedule. For example, an illustrative annual PMI rate of 0.60% on a fixed $240,000 basis gives $1,440 per year, or $120 per month. The optional rate fields can use this method when it matches the written quote. If the basis changes, compare only the period it covers. For loans that differ in interest rate, amount or fees, also compare the full Loan Estimates.
Extra principal can change when you can ask
Suppose you paid $325,000 for a home appraised at $315,000 when you bought it. Using the lower figure, the 80% balance is $252,000. Your schedule shows $253,000 due, but extra payments have brought the actual balance to $250,000. Your actual balance has crossed the request threshold even though your scheduled balance is still $1,000 above it.
For an eligible loan you can request cancellation in writing. The servicer also checks payment history and whether you are current. It can require confirmation of no junior liens and evidence that the property has retained its original value. The ordinary 78% automatic test uses the scheduled balance, which in this example is still $7,300 above $245,700. Confirm the dates and required documents with your servicer before changing a payment. CFPB guidance on removing PMI
How this PMI calculator works
For each quote, add the upfront cash premium to the monthly PMI charge multiplied by the number of charged months. Compare the resulting outlays. The calculator uses whole cents, excludes refunds, and leaves an unknown premium or balance open. The number of charged months is your scenario. Changing it does not change your lender’s payment schedule.
For a purchase, use the lower of the contract price and the original appraisal. For a refinance, use the appraisal at that refinance. Multiply the applicable original value by 80% and 78%. When a threshold falls between two cents, the displayed amount is the highest whole-cent balance at or below it. Read the scheduled balance for the same payment month as your statement from the applicable amortization schedule.
Which PMI cancellation rules apply?
When is conventional PMI normally removed automatically?
For loans covered by the ordinary federal rule, the scheduled date when principal reaches 78% is the automatic termination point if payments are current. If payments are late, contact the servicer about termination once current. If PMI continues, the final midpoint rule generally ends it on the first day of the month after the midpoint of the amortization period if payments are current. A 30-year loan reaches its midpoint after 15 years. A modification can change the schedule. Homeowners Protection Act, 12 U.S.C. § 4902
Can I use current market value or an online home estimate?
Use the applicable original value for this worksheet. Some investors allow a separate cancellation process based on a later valuation. Ask your servicer which program applies, what valuation it accepts and who pays any appraisal fee. CFPB on original value and investor guidelines
Can I use these thresholds for FHA, USDA, VA or lender-paid coverage?
Use this worksheet for conventional borrower-paid PMI. The ordinary threshold discussion concerns eligible loans on a single-family principal residence closed on or after July 29, 1999. Designated high-risk loans and lender-paid insurance can follow different rules. FHA mortgage insurance, USDA guarantees and the VA funding fee follow their own programs. Check the loan type and your servicer’s disclosures before using a threshold. CFPB comparison of mortgage insurance programs