How Much Does PMI Cost?
Private mortgage insurance (PMI) typically costs 0.3% to 1.5% of your loan amount per year — about $30 to $70 a month for every $100,000 borrowed. Conventional loans require it whenever your down payment is under 20% (a loan-to-value ratio above 80%).
PMI protects the lender, not you, if you default. The good news: unlike FHA mortgage insurance, conventional PMI is temporary — it cancels automatically once you reach 78% loan-to-value, and you can request removal at 80%. Your credit score moves the cost more than anything else.
PMI cost by credit score
Credit score is the biggest lever on PMI. A borrower with excellent credit can pay roughly a third of what a borrower with fair credit pays for the exact same loan. The rates below are typical estimates — your actual premium depends on the insurer, your down payment, loan term and debt-to-income ratio.
| Loan amount | Good credit (~0.5%) | Fair credit (~1.0%) |
|---|---|---|
| $200,000 | $83/mo | $167/mo |
| $300,000 | $125/mo | $250/mo |
| $400,000 | $167/mo | $333/mo |
| $500,000 | $208/mo | $417/mo |
What determines your PMI rate
Three factors set the premium: your credit score, your loan-to-value ratio (a bigger down payment means less PMI), and your loan details (term, fixed vs adjustable, and debt-to-income ratio). Because the rate is a percentage of the loan, larger loans cost more in dollars even at the same rate.
PMI is almost always cheaper than not buying at all if home prices are rising — but improving your credit score before you apply, or putting down even a few percent more, can cut the premium substantially.
How to get rid of PMI
By federal law (the Homeowners Protection Act), your servicer must automatically cancel PMI when your balance reaches 78% of the home’s original value, as long as you are current on payments. You can request cancellation at 80% in writing — often the faster route.
You can reach 80% sooner by paying down principal, or by getting a new appraisal if your home’s value has risen enough to push you below the threshold. Refinancing out of an FHA loan into a conventional one is another common way to drop mortgage insurance once you have 20% equity.
How much is PMI per month?
Roughly $30 to $70 a month for every $100,000 borrowed, depending mainly on your credit score. On a $300,000 loan that is about $125/month with good credit and up to $250/month with fair credit.
How can I avoid PMI?
Put down at least 20% (an 80% loan-to-value ratio), use a piggyback second loan to cover part of the down payment, or choose a lender-paid PMI loan that trades a slightly higher interest rate for no separate PMI charge. A VA loan requires no mortgage insurance at all.
When does PMI go away?
Conventional PMI cancels automatically once your loan balance hits 78% of the home’s original value. You can request removal at 80%. Unlike FHA mortgage insurance, it does not last the life of the loan.
Does credit score affect PMI?
Yes — more than any other single factor. Excellent credit (760+) can mean a PMI rate around 0.3% a year, while fair credit (620–639) can push it to about 1.5% for the same loan, roughly tripling the monthly cost.