PMI payment amounts depend on your loan size, down payment percentage, credit score, and the lender's pricing
PMI (private mortgage insurance) is not a fixed cost. Your monthly payment typically ranges from 0.3% to 1.5% of your original loan amount per year, paid in monthly installments. A borrower with a $300,000 mortgage and a 5% down payment might pay $100 to $300 per month; another borrower with the same loan size but a 10% down payment and higher credit score might pay $60 to $150. The exact amount depends on four main factors: how much you borrowed, how much you put down, your credit score at the time you locked the rate, and which lender you chose.
PMI is not optional if you put down less than 20% on a conventional loan. It protects the lender, not you, and it stays on your loan until you reach 20% equity or refinance. Understanding what you will actually pay requires knowing your specific numbers and asking your lender for a written estimate before you close.
Key Takeaways
- PMI typically costs between 0.3% and 1.5% of your loan amount per year, divided into 12 monthly payments.
- Your exact rate depends on your down payment size, credit score, loan amount, and the lender's risk assessment.
- Lenders must provide a written PMI estimate before closing, so you know the exact monthly cost before you sign.
- PMI drops off automatically when you reach 20% equity, or you can request removal once you hit that threshold.
- Paying a larger down payment upfront reduces both your loan size and your PMI cost.
How lenders calculate your PMI rate
Lenders assign a PMI rate based on your loan-to-value ratio (LTV) — the percentage of the home's value you are borrowing. If you buy a $400,000 home with $80,000 down, your LTV is 80%, meaning you need PMI. The lower your down payment, the higher your LTV and the higher your PMI rate.
Your credit score at the time you apply also moves the rate up or down. A score of 740 or higher typically gets the lowest PMI rates. A score between 660 and 739 pays more. Below 660, rates climb further. Lenders see lower credit scores as higher risk, so they charge more for PMI to offset that risk.
The loan amount itself matters too. Jumbo loans (over $766,550 in most of the country in 2024, though this varies by region) often carry higher PMI rates than conforming loans. Some lenders also charge different rates based on the property type — a single-family home may have lower PMI than a condo or investment property.
What a typical PMI payment looks like
| Loan Amount | Down Payment | LTV | Credit Score Range | Estimated Monthly PMI |
|---|---|---|---|---|
| $300,000 | 5% ($15,000) | 95% | 740+ | $150–$200 |
| $300,000 | 5% ($15,000) | 95% | 680–739 | $180–$240 |
| $300,000 | 10% ($30,000) | 90% | 740+ | $90–$130 |
| $500,000 | 10% ($50,000) | 90% | 740+ | $150–$220 |
These are estimates based on typical 2024 rates from major lenders. Your actual payment will vary. The only way to know your exact cost is to get a Loan Estimate from your lender, which they must provide within three business days of your application. This document shows your PMI payment on line 2 of the "Loan Costs" section.
PMI is usually rolled into your monthly mortgage payment, so you do not write a separate check. It appears as a line item on your mortgage statement. Some lenders offer upfront PMI, which you pay as a lump sum at closing instead of monthly payments. This is less common and usually costs more overall, but it reduces your monthly payment slightly.
How down payment size changes your PMI cost
A larger down payment cuts your PMI in two ways: it lowers your loan amount, and it lowers your LTV, which moves you into a better rate tier. Putting down 10% instead of 5% on a $300,000 home reduces your loan from $285,000 to $270,000 and drops your LTV from 95% to 90%. That shift typically cuts your PMI rate by 0.2% to 0.4% per year, which translates to $50 to $100 less per month.
Putting down 15% instead of 10% produces a smaller but still meaningful drop. The jump from 10% to 20% is the biggest: once you hit 20% down, PMI disappears entirely. For a $300,000 home, the difference between 10% down and 20% down is roughly $150 to $200 per month in PMI savings, plus the removal of PMI altogether once you refinance or pay down the principal.
Some borrowers use a piggyback loan (a second mortgage) to avoid PMI without putting down 20%. For example, you might put down 10%, take out a first mortgage for 80%, and a second mortgage for the remaining 10%. This avoids PMI but creates two monthly payments and two sets of closing costs, so it only makes sense in specific situations.
When PMI drops off your loan
PMI is required only until you reach 20% equity in the home. This happens in two ways: either you pay down the principal to 80% LTV, or the home appreciates and your equity grows. Once you hit 20% equity, you can request PMI removal from your lender. Federal law requires lenders to remove PMI automatically once you reach 22% equity (through principal paydown alone, not appreciation).
The timeline depends on your down payment and how fast you pay down the loan. A borrower who puts down 5% and makes regular payments will typically reach 20% equity in 5 to 8 years. One who puts down 10% reaches it faster, usually in 3 to 5 years. Refinancing into a new loan at 80% LTV or lower also removes PMI immediately, though you pay closing costs to refinance.
Some lenders offer lender-paid PMI, where the lender covers the PMI cost but charges you a higher interest rate instead. This can make sense if you plan to sell or refinance within a few years, but it costs more over the life of a 30-year loan.
How to get your PMI estimate before closing
Your lender is required to send you a Loan Estimate within three business days of your application. This is a standardized form (LE Form 1003) that shows all costs, including PMI. The PMI payment appears on page 1, line 2, under "Loan Costs." It shows both the monthly payment and the total PMI you will pay over the life of the loan (though this is an estimate and may change).
If you receive a Loan Estimate and the PMI seems high, you can shop around. Different lenders price PMI differently, and a 0.1% or 0.2% difference in rate adds up to $30 to $60 per month. You have the right to compare estimates from multiple lenders before you commit. You will also receive a Closing Disclosure three business days before closing, which confirms the final PMI amount.
If your credit score improves after you lock your rate but before closing, ask your lender whether they will recalculate your PMI based on the new score. Some will; others will not. It never hurts to ask.
Frequently Asked Questions
Can I pay off PMI early?
You cannot pay off PMI as a lump sum. You must pay it monthly until you reach 20% equity, at which point you request removal. Paying extra toward principal speeds up the timeline to 20% equity, which removes PMI faster, but you cannot skip the monthly payments in the meantime.
Does PMI go down over time?
Your monthly PMI payment stays the same throughout the loan. It does not decrease as you pay down principal. However, once you reach 20% equity, the entire PMI payment stops. Some lenders offer declining PMI, where the rate drops at certain equity milestones, but this is rare and usually only available on jumbo loans.
What if I refinance — does PMI go away?
If you refinance into a new loan at 80% LTV or lower, PMI is removed. If you refinance but still owe more than 80% of the home's current value, you will need PMI on the new loan. Refinancing costs closing fees, so compare the cost of refinancing against the PMI savings before you decide.
Is PMI tax deductible?
PMI was tax deductible under certain income limits, but that deduction expired at the end of 2023 and has not been renewed. Check with a tax professional about your specific situation, as rules can change and some states may have their own deductions.
How much does PMI cost on a $200,000 loan?
On a $200,000 loan with 10% down (90% LTV) and a 740+ credit score, PMI typically runs $60 to $100 per month. With 5% down (95% LTV), expect $100 to $150 per month. Your lender's Loan Estimate will show the exact amount for your situation.