PMI and your US mortgage payment: when it can end
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By Editorial team
Take a $400,000 US home with the same 6.8% 30-year quote. At 5% down, PMI modeled at 0.58% annually lifts the month-one P&I plus MI payment to about $2,845 and pushes total interest near $511,834. Bring 20% down on the identical rate, drop PMI entirely, and the opening payment slides to about $2,086 with interest around $431,018. That is roughly $80,816 more lifetime interest and years of higher monthly payments simply because the starting LTV crossed the MI threshold. This is for buyers deciding whether to accept PMI now and cancel it later, or hold off and save toward 20% down.
The scenario modeled
Both scenarios use the same 6.8% rate and 30-year term with a May 2026 start date, no taxes or insurance. Only the down payment changes, which affects both the loan balance and whether PMI applies.
| Input | 5% down | 20% down |
|---|---|---|
| Loan amount | $380,000 | $320,000 |
| Rate | 6.80% | 6.80% |
| PMI | 0.58% of original balance | None |
| Term | 30 years | 30 years |
The findings
PMI on a conventional loan cancels once the loan balance reaches 80% of the original home value, typically around year 11 on this scenario. Until then, the $184 monthly PMI charge is real cash out the door. Once it drops, the payment falls to about $2,477. The $575/month gap between the two scenarios shrinks meaningfully at that point. Track your cancellation date with your servicer; some require a written request even when the LTV threshold has been met.
| 5% down | 20% down | Difference | |
|---|---|---|---|
| Month 1 P&I + MI | $2,845 | $2,086 | $759/month lower without MI |
| MI portion (approx.) | $184 | $0 | Until cancelled (~yr 11) |
| Total interest (30 years) | $511,834 | $431,018 | $80,816 more with smaller down |
US context
Under the Homeowners Protection Act, servicers must automatically terminate PMI at 78% LTV of the original value when you are current on payments, and must terminate on borrower request at 80% LTV. Your original closing disclosure controls the LTV math, not today's market value unless you request a new appraisal. Servicers implement the edges of these rules differently, so keep your documentation handy when you request removal.
Source: Consumer Financial Protection Bureau, "When can I remove private mortgage insurance (PMI) from my loan?" accessed April 2026. URL: https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/
When this comparison applies, and when it does not
Use it when you have a conventional appraisal in hand and want to see how MI payments add to total interest cost before you lock, or when you are deciding whether to bring more cash to closing.
Pause when you are comparing FHA MIP schedules or lender-paid MI structures, where the calculator percent field does not mirror your loan officer's worksheet. Confirm the MI type and rate directly before trusting the totals.
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Frequently asked questions
- When does private mortgage insurance go away on a conventional loan?
- Borrower-paid PMI on conforming conventional loans can usually be removed at 80% LTV based on the original amortization or current market value, depending on investor rules and seasoning. Automatic termination often applies near 78% LTV on the original schedule for standard fixed loans.
- How much does PMI add to my payment?
- It depends on credit score, coverage tier, and LTV. In our modeled $400,000 home with 5% down, PMI priced at 0.58% annually adds about $184 per month on top of P&I at the start.
- Is PMI the same as FHA MIP?
- No. FHA mortgage insurance follows HUD rules and may last the full term on newer case numbers with low down payments, while conventional PMI can end with enough equity.
- Should I pay points instead of boosting my down payment?
- Compare both tabs in the calculator. Points change rate; down payment changes MI and balance. The winning combination depends on how long you keep the loan.