PMI Removal Calculator
Find out when you'll have 20% equity to remove costly Private Mortgage Insurance.
How This Tool Works
This calculator estimates when you will reach the magic 20% equity threshold required to cancel Private Mortgage Insurance (PMI) based on your original home value and scheduled principal payments.
- Formula:
Original Price * 0.80 = PMI Removal Balance. - Logic: We calculate your monthly amortization schedule to find the exact month your balance drops below 80% (request date) and 78% (automatic date) of the original price.
- Assumptions: Calculations are based on your original purchase price. It does not account for market appreciation unless you pay for a new appraisal.
How to Use (Steps)
- Original Price & Loan: Enter the home price and loan amount from your closing documents.
- Loan Terms: Enter your interest rate and the length of your term (e.g., 30 years).
- Start Date: Select the date of your first mortgage payment.
- Analyze: Review the removal dates. Mark your calendar for the 80% date to proactively contact your lender.
Example Calculation
Scenario: $400,000 Purchase with 5% down ($380,000 Loan) at 7%.
• 80% Threshold: $400,000 * 0.80 = $320,000 balance.
• Principal to Pay: $380,000 - $320,000 = $60,000.
• Removal Date: It will take approximately 8 years and 4 months of standard
payments to reach this point.
• Outcome: Removing a $150/mo PMI fee at that point saves you thousands over the remaining
21 years.
Why This Tool Is Accurate
Under the federal Homeowners Protection Act (HPA), lenders are required to terminate PMI when you reach certain equity levels. This tool uses standard amortization math to predict those specific legal milestones for you.
Limitations & Disclaimer
This tool assumes "Original Value." If your home value has skyrocketed, you may be able to remove PMI much earlier by ordering a broker price opinion (BPO) or appraisal. Disclaimer: Final removal depends on your lender's specific policies and your payment history.
Frequently Asked Questions
At 80% LTV, you have the right to request cancellation (usually requires a clean payment history). At 78% LTV, the lender is legally required to terminate it automatically, even if you don't ask.
Yes! If your local market has improved, you can ask for a New Appraisal. If the new value shows you have 20% equity (LTV of 80% or less), you can usually cancel PMI immediately, regardless of what this calculator says.
Usually no. Most FHA loans (started after June 2013 with less than 10% down) have Mortgage Insurance Premiums (MIP) that last for the entire life of the loan. To remove it, you typically must refinance into a Conventional loan.