PMI Formula Explained
The math behind the PMI Calculator: the equation, the variables, and the assumptions it makes.
By Onias Derilus, Mortgage Capital · NMLS# 1859012 · Last Updated: June 2026
It estimates your monthly private mortgage insurance cost on a conventional loan and shows when you can expect to drop it as your equity grows.
The Formula
Monthly PMI = (loan amount × annual PMI rate) / 12
PMI rates depend mostly on your down payment and credit score — a higher credit score and larger down payment both lower the rate. The premium is a percentage of the loan, charged monthly until you reach the equity threshold.
On conventional loans, PMI automatically terminates when the balance reaches 78% of the original value, and you can request removal at 80%. The calculator estimates how many payments that takes.
Turn Your PMI Estimate Into a Real Pre-Approval
Get a personalized rate quote from a licensed Florida mortgage broker — no obligation. NMLS# 1859012.
Rates are illustrative only. APR and payments vary by credit score, loan amount, and market conditions. Subject to credit approval. Not a commitment to lend. NMLS# 1859012. Equal Housing Lender.