How the PMI Calculator works

The formula

Step by step

1. Monthly PMI is the annual rate applied to the ORIGINAL loan amount — it does not shrink as the balance falls.
2. The amortization schedule is walked month by month, including any extra principal, to find the first month the balance reaches 80% of the original purchase price. At that point you may REQUEST cancellation in writing.
3. The same walk finds 78%, at which the servicer MUST cancel automatically, without a request or an appraisal, provided the loan is current.
4. The statutory midpoint of the term (month 180 of a 30-year loan) is applied as a backstop: PMI must end there regardless of balance. Most PMI calculators omit this rule entirely.
5. Whichever of those comes first sets the real end date; total cost is the monthly premium multiplied by the months it is actually charged.

Assumptions & limitations

• Borrower-paid PMI on a CONVENTIONAL loan. FHA mortgage insurance follows different rules — with under 10% down, MIP generally lasts the life of the loan — and VA loans carry no monthly mortgage insurance.
• All thresholds are measured against the ORIGINAL property value. Cancellation based on a new appraisal after the home appreciates is possible but depends on a valuation we cannot know, so it is not modeled.
• Lender-paid PMI, which is priced into the interest rate rather than charged separately, is outside this calculation.
• Your servicer's exact timing may differ, and cancellation at 80% is a request they can condition on appraisal, payment history and the absence of a second lien.