How Much Is PMI?
PMI typically costs between $30 and $70 per month for every $100,000 you borrow, according to Freddie Mac. On a $300,000 loan, that's roughly $90 to $210 a month, and where you land in that range depends mostly on your credit score and your down payment.
PMI, or private mortgage insurance, is the coverage lenders require on conventional loans with less than 20 percent down. It protects the lender, not you, and in exchange it lets you buy a home years before you could save a 20 percent down payment.
The Basics
- PMI typically costs $30 to $70 per month for every $100,000 you borrow
- Your credit score and down payment size move the number more than anything else
- Most buyers pay PMI monthly, but single, split, and lender-paid options exist
- PMI is temporary; it ends once you build enough equity, and removal doesn't require refinancing
PMI Cost per Month by Loan Size
The fastest way to estimate your PMI is to scale the Freddie Mac range to your loan amount. These are the monthly ranges for common loan sizes:
| Loan amount | Typical PMI per month |
|---|---|
| $200,000 | $60 to $140 |
| $300,000 | $90 to $210 |
| $400,000 | $120 to $280 |
| $500,000 | $150 to $350 |
Strong credit and a 15 percent down payment put you near the bottom of your row. A lower score with 5 percent down puts you near the top. Your Loan Estimate shows the exact figure for your file on page 1, inside the projected payments table, so you never have to guess for long.
What Determines Your PMI Rate
Credit score moves your PMI price more than any other factor. Mortgage insurers price in score bands, and crossing from one band into the next can change the premium meaningfully, which is why two neighbors with identical loans can pay very different PMI.
Your down payment sets the loan-to-value ratio, or LTV, and it works in tiers rather than a smooth line. Putting 10 percent down instead of 5 buys a cheaper tier; 15 percent buys a cheaper tier still. Freddie Mac's guidelines require mortgage insurance whenever the LTV exceeds 80 percent, and the closer you start to that line, the less coverage the lender needs and the less you pay.
A few quieter factors round out the price. Larger loans and longer terms carry slightly higher rates. Loans with more required coverage cost more, and the coverage requirement itself varies by program. A second home prices differently than a primary residence. None of these move the number the way score and down payment do, but together they explain why published averages can miss your quote in either direction.
The Four Ways PMI Gets Paid
Most buyers pay PMI as a monthly line inside the mortgage payment, but that's a default, not the only option:
| Structure | How it works |
|---|---|
| Monthly, borrower-paid | The standard: a premium added to each payment, cancellable later |
| Single premium | One upfront payment at closing, nothing monthly |
| Split premium | A smaller upfront payment plus a reduced monthly amount |
| Lender-paid | The lender covers the premium in exchange for a higher rate |
Monthly borrower-paid PMI is usually the right call for buyers who expect to reach 20 percent equity within several years, because it simply stops when the coverage ends. Single and split premiums can make sense when a seller credit needs somewhere to go at closing. Lender-paid mortgage insurance trades a cancellable cost for a permanent one, since the higher rate lasts the life of the loan, and it deserves its own comparison before you choose it.
How to Pay Less for PMI
Since score bands and down payment tiers set the price, the levers are the same ones that improve your whole loan. If your credit score sits just below a band boundary, a few months of paying balances down before you apply can drop both your rate and your PMI. If your savings sit just below a tier boundary, ask your loan officer what 10 percent down does to the premium compared to 8; the answer sometimes surprises people. Down payment assistance can push you over a tier you couldn't reach alone.
Compare whole payments, not headline rates. PMI comes from the mortgage insurer your lender works with, so the same buyer can get different PMI quotes at different lenders. A lender with a slightly higher rate and meaningfully cheaper PMI can win the monthly math.
In my work as a loan officer, one lever surprises almost everyone: homebuyer education. Completing a course like Freddie Mac's CreditSmart can qualify buyers for better mortgage insurance pricing under some programs, and underwriters sometimes ask for a course completion certificate anyway. A few hours of homework that lowers a monthly bill is rare in this business.
On taxes: the deductibility of PMI premiums has changed several times over the years, and Congress has revisited it repeatedly. Ask a CPA what applies to the year you're filing rather than assuming either way.
PMI Is Temporary
Every dollar in the ranges above has an end date. On conventional loans, PMI cancels automatically when your balance amortizes down to 78 percent of the home's original value, and you can request removal at 80 percent. If your home's value has risen, an appraisal can get you there years early; the removal triggers and their paperwork have their own guide, as does the appraisal-based path.
That end date changes the math on whether PMI is worth paying at all. A buyer who waits five years to save a 20 percent down payment competes against five years of price growth; a buyer who takes the PMI starts building equity now and cancels the coverage later. Whether that trade makes sense mechanically gets a fair hearing in is PMI always a bad deal?
How Much Is PMI: A Real World Example
A buyer purchases a $360,000 home with 10 percent down, borrowing $324,000. Scaling the Freddie Mac range, their PMI lands somewhere between $97 and $227 a month; with solid credit and that 10 percent down payment, call it about $160 at a mid-range price.
Their cancellation target is a $288,000 balance, which is 80 percent of the home's original value. Regular payments alone get there in roughly seven to eight years at recent rates, and if the home appreciates, an appraisal can end the coverage years sooner. Suppose appreciation gets it done in five years at $160: about $9,600 in total PMI.
Now the comparison that matters. Saving the extra $36,000 for a 20 percent down payment might have taken those same five years, while prices moved without them. The $9,600 wasn't a penalty; it was the price of owning the home for those five years instead of waiting for it. PMI works out badly mainly for buyers who forget to cancel it, and the removal triggers exist so you don't.
Common Questions About PMI Costs
Common questions about what PMI costs, whether it's worth paying, and when it goes away.
