Quick Answer: How Much Is PMI Per Month?
On a $250,000 loan, Private Mortgage Insurance (PMI) typically costs between $100 and $200 per month. The exact amount depends heavily on your credit score and down payment percentage. Generally, PMI runs between 0.5% to 1% of the total loan amount annually, divided into 12 monthly payments.
The Full Calculation: How PMI is Determined
PMI isn't a flat fee. Lenders calculate it based on the risk you pose. If you buy a $265,000 house and put roughly 5% down ($15,000), you are left with a $250,000 loan balance.
Let's look at three scenarios based on different credit profiles for that $250k loan:
- Excellent Credit (760+): PMI rate around 0.35%. Annual cost is $875. Monthly PMI: $72
- Good Credit (700): PMI rate around 0.75%. Annual cost is $1,875. Monthly PMI: $156
- Fair Credit (640): PMI rate around 1.5%. Annual cost is $3,750. Monthly PMI: $312
As you can see, a lower credit score can easily quadruple the amount of money you throw away every month on mortgage insurance.
What Affects This Number?
Your PMI rate is dynamic. It is influenced by:
- Your Down Payment: Putting 10% or 15% down instead of 3% or 5% significantly lowers the PMI multiplier used by the lender.
- Your Loan Type: Conventional loans use private insurers, whose rates fluctuate based on credit. FHA loans, on the other hand, charge a fixed Mortgage Insurance Premium (MIP) regardless of your credit score (currently 0.55% for most loans).
- Your Debt-to-Income Ratio: Lenders see buyers with high DTI as higher risk, which can sometimes result in slightly higher PMI rates.
How to Lower Your Payment (or Avoid PMI)
Nobody wants to pay PMI, as it protects the lender, not you. Here is how to lower it or get rid of it:
- Put 20% Down: The only surefire way to avoid PMI upfront on a conventional loan is to make a 20% down payment.
- Improve Your Credit Score: If you must put less than 20% down, boosting your credit score from 680 to 740 before applying can cut your PMI payment in half.
- Lender-Paid PMI: Some lenders offer "no PMI" loans with less than 20% down, but be warned: they simply charge you a higher interest rate instead. You have to do the math to see which option is cheaper.
Use Our Free Calculator
Stop guessing how much PMI will cost you. You can enter your home price and down payment into our calculator to see an estimated PMI cost instantly.
Calculate Your Monthly Payment With PMI
See exactly how much PMI adds to your monthly mortgage bill.
Use the Main Mortgage Calculator →Frequently Asked Questions
When can I remove PMI from my loan?
On a conventional loan, you can request PMI cancellation when your loan balance reaches 80% of the home's original value. It automatically falls off at 78%.
Does PMI apply to FHA loans?
FHA loans have their own version of PMI called Mortgage Insurance Premiums (MIP). Unlike conventional PMI, FHA MIP typically stays on the loan for the entire 30 years unless you put at least 10% down initially.
Is PMI tax deductible?
As of the current tax code, PMI is generally not tax-deductible for most homeowners. Always consult a CPA for the most up-to-date tax laws regarding mortgage deductions.