How Much Does PMI Cost?

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Published Feb. 3, 2023
A couple signs PMI paperwork at kitchen counter.
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Most lenders require you to purchase private mortgage insurance if you’re taking out a conventional loan with a down payment that’s less than 20% of the home’s purchase price.

So, how much is PMI going to cost? Here’s what you need to know about paying for PMI.

How Is PMI Calculated?

PMI typically costs $30 to $70 per month for every $100,000 you borrow.

Take a look at this example of how that would work for a $500,000 home with a 30-year fixed-rate mortgage at a 6% interest rate:

PMI for a $500,000 Home With a 30-Year Mortgage at a 6% Interest Rate

Down PaymentPMI PremiumMonthly Payment
Source: Freddie Mac’s PMI calculator. Property taxes and homeowners insurance costs were held constant at $3,250 per year and $1,000 per year, respectively. Note: This table is intended to serve as an example of how PMI works in general. It is not intended to be used for financial advice, or to calculate the exact costs of a specific mortgage.

PMI costs will be listed on Page 1 of your loan estimate and closing disclosure. The loan estimate arrives within three days of submitting your mortgage application, while the closing disclosure comes at least three days before you close.

Factors that influence PMI 

The exact cost of your PMI coverage will depend on the following factors.

Down payment

A borrower who makes a smaller down payment poses more risk to the mortgage lender than a borrower who has a greater stake in the property. That means the less money you put toward your down payment, the more you’ll typically pay in PMI.

Loan amount

PMI is calculated in part based on how much money you’re borrowing. So, the larger the loan, the more you can expect to pay in PMI.

Loan type

Fixed-rate mortgages carry less risk because they offer stable monthly payments. Adjustable-rate mortgages are less predictable, as your interest rate can change from time to time and increase. As a result, you may pay less in PMI for a fixed-rate mortgage.

Credit score

Borrowers with a higher credit score have a proven history of managing their debts, which is a green flag for lenders. If you have strong credit, you can minimize what you’ll pay in PMI. 

How Do I Pay For PMI?

There are several types of PMI policies that have different payment structures.


One option is to pay for PMI upfront in a lump sum. However, borrowers who can only afford a smaller down payment might not have the cash to pay for PMI all at once.

Monthly payments

A common way to pay for PMI is to add the premium to your monthly mortgage payments until you reach 20% equity. After that, you can cancel your PMI policy. 


A third option allows you to pay for some of your PMI coverage upfront and the rest with ongoing payments. This helps you lower your monthly PMI costs without the pressure of paying for it all at once.

Is PMI Tax Deductible?

PMI is tax deductible for many homeowners. However, if your adjusted gross income exceeds $100,000, then the amount you can deduct is reduced. Homeowners who have an adjusted gross income higher than $109,000 cannot deduct PMI from their taxes.


These are the answers to some frequently asked questions about paying for PMI.


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