Private mortgage insurance, or PMI, looks like a mystery fee on your loan estimate. It is not. It is a short formula with two inputs, and the end date is set by federal law. This post shows both parts with one round-number example. It prices a $300,000 loan at two credit scores. Then it counts the months until the PMI has to stop. It does not tell you which lender or insurer to pick. It shows how the pieces fit.
A worked example, with round numbers first
Start with a loan of $300,000. You are buying a home priced at about $333,333, and you put down 10 percent, which is about $33,333. The loan is a 30-year fixed loan at 7.40 percent. That rate is the Freddie Mac weekly average for the week of October 8, 2026, and it was unchanged on October 15.
Your loan-to-value ratio, or LTV, is the loan divided by the home's value. Here that is $300,000 divided by $333,333, which is 90 percent. A lower LTV means you own more of the home, so the insurer takes less risk. Your credit score tier is the range your credit score falls in, such as 760 and above. Insurers price in tiers, not in single scores.
Now the formula, in words. Take the yearly PMI rate from the rate card. Multiply it by the loan amount. Divide by 12. That is the monthly PMI. The rate card used here is the one behind this site's PMI calculator. It comes from one insurer, National MI, and it was read again today. The rows below are the ones for a 90 percent LTV on a 30-year fixed loan.
| Step | 760 and above | 680 to 699 |
|---|---|---|
| Yearly rate from the card | 0.28% | 0.65% |
| Times the loan amount | $300,000 x 0.0028 = $840 | $300,000 x 0.0065 = $1,950 |
| Divide by 12 | $70.00 a month | $162.50 a month |
| Loan payment (principal and interest) | $2,077.14 | $2,077.14 |
| Monthly total | $2,147.14 | $2,239.64 |
Rates are from National MI's Monthly Advantage card for borrower-paid mortgage insurance, effective March 1, 2022, 30-year fixed, primary home, read October 16, 2026. The card is one insurer's price list, and it is more than four years old. Your quote will differ. The loan payment is the standard loan formula on $300,000 at 7.40 percent for 360 months.
The gap between the two columns is $92.50 a month, or $1,110 a year. The loan is the same. The home is the same. Only the credit tier changed. That is the main point about how PMI is calculated: the loan amount sets the base, and the credit tier and the LTV set the percentage.
Now the end date. Your loan payment stays at $2,077.14. Early on, most of it is interest. After payment number 105, which is 8 years and 9 months in, the loan balance is $266,593. That is below $266,667, which is 80 percent of the original value. After payment number 120, which is 10 years in, the balance is $259,808. That is below $260,000, which is 78 percent. So you can ask to end PMI after month 105, and the lender must end it after month 120.
| Credit tier | Monthly PMI | Total to month 105 (you ask) | Total to month 120 (automatic) |
|---|---|---|---|
| 760 and above | $70.00 | $7,350 | $8,400 |
| 680 to 699 | $162.50 | $17,063 | $19,500 |
Monthly PMI times the number of months. This assumes the premium stays level, as this site's PMI calculator does, and that you are current on payments. Premiums for months already used are not refunded.
Asking at month 105 instead of waiting for month 120 saves 15 payments. That is $1,050 at the 760 tier and $2,437.50 at the 680 to 699 tier. The rest of this post explains where each number comes from, and what can move the dates.
How insurers set the yearly rate
PMI is a policy. A private company sells it to your lender, and the lender passes the cost to you. The Consumer Financial Protection Bureau (CFPB) says PMI protects the lender, not you. If you stop paying, you can still lose your home. PMI is typically needed on a conventional loan when your down payment is under 20 percent of the price.
Insurers publish rate cards. A rate card is a grid of yearly rates. One side is the LTV in bands. The other side is the credit score in tiers. A third setting is the coverage level. Coverage is the share of the loan the insurance would pay back to the lender after a loss. Fannie Mae, one of the two big buyers of home loans, sets the standard coverage by LTV. For a 30-year fixed loan it is 12 percent when the LTV is 80.01 to 85 percent, 25 percent for 85.01 to 90, 30 percent for 90.01 to 95, and 35 percent for 95.01 to 97. A higher LTV needs more coverage, so the rate is higher.
| LTV band | Coverage | 760+ | 720 to 739 | 680 to 699 | 640 to 659 |
|---|---|---|---|---|---|
| 95.01% to 97% | 35% | 0.58% | 0.87% | 1.21% | 1.65% |
| 90.01% to 95% | 30% | 0.38% | 0.66% | 0.96% | 1.33% |
| 85.01% to 90% | 25% | 0.28% | 0.46% | 0.65% | 0.91% |
| 85% and under | 12% | 0.19% | 0.23% | 0.28% | 0.40% |
National MI Monthly Advantage card MA.MN.BP.2022-03, borrower-paid, primary home, loans over 20 years. National MI's products page still lists this as its traditional rate card, read October 16, 2026. Coverage levels are Fannie Mae's standard levels (Selling Guide B7-1-02, read October 16, 2026). This is one insurer, not a market average.
Read the table from top to bottom. At a 760 score, the rate falls from 0.58 percent to 0.19 percent as the down payment grows. Read it left to right. At 85.01 to 90 percent LTV, the rate rises from 0.28 percent to 0.91 percent as the score falls. One basis point is one hundredth of a percentage point, so the gap between 0.28 and 0.65 percent is 37 basis points.
The card also lists extra charges. The same card adds to the base rate for a second home, an investment property, a cash-out refinance, and a debt-to-income ratio above 45 percent. Debt-to-income, or DTI, is your monthly debt payments divided by your monthly income before tax. The card says its rates may not be offered in every state or at every score. The simple grid is a starting point.
Who pays: borrower-paid and lender-paid
In the example the borrower pays PMI each month. That is called borrower-paid mortgage insurance. It is the common kind, and it is the kind the end dates below apply to. The CFPB says PMI can also be paid as one up-front premium at closing, or as a mix of both. Your Loan Estimate and Closing Disclosure show which one you have.
A second kind is lender-paid mortgage insurance. The lender buys the policy and charges a higher interest rate to cover it. There is no separate PMI line on your bill. The cost sits inside the rate. Under federal law (12 U.S.C. 4905), the lender must tell you before the loan that this kind may not be canceled by the borrower, and that it usually means a higher rate. Fannie Mae's Selling Guide says the lender must keep the coverage in force until the loan is paid in full. If you are comparing the two, ask for the rate with each and look at the total over the years you expect to keep the loan.
When PMI ends: the three dates in federal law
The Homeowners Protection Act of 1998 sets the end dates for borrower-paid PMI on most home loans that closed on or after July 29, 1999. The CFPB says it covers single-family homes that are your main home. FHA and VA loans follow different rules, and so does a loan where the lender pays for the insurance. All three dates use the original value of the home. The law defines that as the lower of the sales price or the appraised value when the loan closed. After a refinance, it is the appraised value at the refinance.
- You ask, at 80 percent. You can ask in writing once the balance is first scheduled to reach 80 percent of the original value. You can also ask sooner if extra payments bring the real balance to 80 percent. The servicer, which is the company that collects your payments, must cancel if you have a good payment history, you are current, you certify there is no second loan on the home, and the home has not lost value.
- It ends on its own, at 78 percent. The servicer must end PMI on the date the balance is scheduled to reach 78 percent of the original value. You do not have to ask. You must be current. If you are behind, PMI ends the first day of the month after you catch up.
- The midpoint, as a backstop. If neither date has come, PMI must end the month after the halfway point of the loan term. For a 30-year loan, that is after 15 years. You must be current. This rule matters most for loans with long interest-only stretches.
The statute calls the 80 percent date the cancellation date and the 78 percent date the termination date. Both are based on the original payment schedule, with one exception. For the 80 percent request, the law also lets you use the date your actual balance reaches 80 percent. A good payment history means no payment 60 days late in the 12 months that start 24 months before the date, and no payment 30 days late in the 12 months before it. The servicer must refund unearned premiums within 45 days.
Fannie Mae's servicing guide repeats these rules for its loans. It adds details. For a home you live in or a second home, the original-value request needs a value check. If today's value is below the original value, the servicer can say no. The guide asks for no payment 30 days or more late in the last 12 months, and none 60 days or more late in the last 24 months. The servicer cannot charge a fee for an automatic termination. For an investment property or a two-to-four-unit home you live in, the automatic date is the midpoint only, and the borrower request needs 70 percent.
How many months until it ends? What moves the date
The end date is a loan-payment calculation, not an insurance one. It depends on how fast the balance falls. Three things speed it up: a bigger down payment, a lower rate, and extra payments. The tables below use the amortization schedule, which is the month-by-month list of how each payment splits into interest and principal. You can build your own with the amortization calculator.
| Down payment | Loan on a $400,000 home | Request at 80% (month) | Automatic at 78% (month) |
|---|---|---|---|
| 5% | $380,000 | 135 (11.3 years) | 147 (12.3 years) |
| 10% | $360,000 | 105 (8.8 years) | 120 (10.0 years) |
| 15% | $340,000 | 64 (5.3 years) | 84 (7.0 years) |
30-year fixed at 7.40 percent, scheduled payments only. The two marks are 80 percent and 78 percent of the original $400,000 value. At 20 percent down there is no PMI to end.
Look at the 5 percent row. At that down payment, the loan takes 11 years to reach 80 percent. The balance falls slowly at a high rate, because most of each early payment is interest. A lower rate speeds it up, but not by as much as many people expect.
| Rate | Loan payment | Request at 80% (month) | Automatic at 78% (month) |
|---|---|---|---|
| 5.50% | $1,703 | 84 (7.0 years) | 98 (8.2 years) |
| 6.50% | $1,896 | 95 (7.9 years) | 109 (9.1 years) |
| 7.40% | $2,077 | 105 (8.8 years) | 120 (10.0 years) |
The 5.50 percent and 6.50 percent rows are what-ifs, not forecasts. The 7.40 percent row is the Freddie Mac average for the week of October 8, 2026 (unchanged on October 15).
Two ways to end PMI sooner
Extra payments
Back to the $300,000 loan. If you add $100 a month toward principal, your real balance reaches 80 percent of the original value at month 80, not month 105. That is 25 months sooner. With $200 a month, it is month 64. The extra money is not lost. It goes into your equity, which is the part of the home you own. At the 680 to 699 tier, the 25 months you skip cost $4,062.50 in PMI at $162.50 a month. Tell your servicer in writing that the extra is for principal, and check that your next statement shows it.
A new value check
The law measures from the original value. But Fannie Mae lets the servicer use the current value on loans it owns. The home must have a valuation, such as an appraisal or a broker price opinion, and you pay for it. The loan must be past its second birthday. Between 2 and 5 years, the balance must be 75 percent or less of today's value. After 5 years, it must be 80 percent or less. Your payment record must be clean as above.
Try the example with a home that is worth $375,000 in five years. At the start of year six the balance is about $283,569. That is 75.6 percent of $375,000, which is under the 80 percent mark. So under Fannie Mae's rule the request would work around month 61, not month 105. That is a what-if. Home values can also fall. Other investors set their own rules, and your servicer will say whose loan you have. A 2026 Fannie Mae lender letter, LL-2026-07, is titled as an update to the termination rules. I could not open it today, so ask your servicer which steps apply now.
The cost of PMI compared with avoiding it
The CFPB lists three ways to avoid PMI. You can put 20 percent down. You can take a conventional loan with a smaller down payment that does not require PMI, though it usually carries a higher rate. Or you can use another loan type, such as an FHA loan, which has its own insurance rules. The last one can cost more or less depending on your case. One more route is a second loan that covers part of the down payment. The site's 80-10-10 piggyback guide works through that case. Each route has its own cost. This post only covers the PMI side.
PMI is also one line in a bigger monthly bill. Principal and interest, taxes, insurance and PMI together make up your payment. The site's post on what PITI means breaks that bill apart. For the tax side of PMI, see whether PMI is tax deductible. To run your own price, use the mortgage calculator for the loan payment and the PMI calculator for the insurance line.
How to check your own PMI, step by step
- Find the loan amount, rate and term on your Loan Estimate or Closing Disclosure. Find the PMI line and whether it is monthly, up front, or both.
- Find the original value. It is the lower of your sales price and the appraisal from closing.
- Multiply the original value by 0.80 and by 0.78. Those are your two target balances.
- Look at your amortization schedule, or build one, and find the first month when the balance is at or below each target. Your PMI disclosure form should also show the first date you can ask.
- Check that you are current on payments and have no second loan on the home. Ask your servicer in writing, and ask what they need.
- After PMI ends, check that your payment dropped and that any extra premium was refunded within 45 days.
None of this tells you to choose a lender, an insurer, or a down payment. It shows how the price and the end date are built, so you can read your own quote with the same steps.