PMI Calculator — 78% LTV Cancellation
Private Mortgage Insurance costs monthly PMI = (loan × annual rate) / 12. By the Homeowners Protection Act of 1998, your lender must automatically cancel PMI when the loan balance hits 78% of original home value. The chart below amortizes principal and marks the cancellation month — green is auto, amber is your earliest borrower- request line at 80%.
Quick Conversion
Formula: monthly_PMI = (loan × rate) / 12
LTV Amortization vs PMI Cancel Line
PMI scenario presets
FICO + LTV → typical PMI rate (Genworth/Arch MI cards)
| FICO | 85% LTV | 90% LTV | 95% LTV |
|---|---|---|---|
| 760+ | 0.23% | 0.33% | 0.55% |
| 740-759 | 0.29% | 0.45% | 0.75% |
| 720-739 | 0.35% | 0.55% | 0.90% |
| 700-719 | 0.44% | 0.70% | 1.15% |
| 680-699 | 0.55% | 0.90% | 1.45% |
| 660-679 | 0.75% | 1.25% | 1.85% |
| 640-659 | 0.98% | 1.55% | 2.20% |
| 620-639 | 1.25% | 1.85% | 2.50% |
Closing costs detail? See Closing Costs Calculator →
Formula
monthly_PMI = (loan × rate) / 12LTV = balance / orig_home_valuecancel when LTV ≤ 0.78 (HPA §504)Worked: $332,500 loan × 0.85% / 12 = $236/mo. At 6.75% / 30yr, balance reaches 78% LTV around month 67 — total PMI paid ≈ $15,800.
From MGIC 1957 to HPA 1998: why PMI exists and when it ends
In 2026, a first-time buyer in Atlanta closing on a $350k home with 5% down pays roughly $236 a month in PMI. Most do not know exactly when that charge stops. The Homeowners Protection Act of 1998 settled the question: at 78% LTV of original value, it stops automatically. This calculator shows the exact month — verified against your own loan amortization.
The Federal Housing Administration (FHA), created by Title II of the National Housing Act of 1934, introduced the modern low-down-payment mortgage. Before FHA, most home loans were 50% LTV, 5-year balloon notes. FHA insured 30-year fully-amortizing loans at up to 95% LTV — but the insurance was government-provided (FHA MIP). The private mortgage insurance industry filled the conventional-loan gap.
Max Karl, a Milwaukee lawyer, founded the Mortgage Guaranty Insurance Corporation (MGIC) in 1957 — the first modern private mortgage insurer. MGIC was followed by Genworth, Radian, Arch MI, Essent, and National MI (the "Big Six" PMI carriers as of 2026). All publish risk-priced rate cards by FICO and LTV — the framework reflected in the calculator's rate table.
The Servicemen's Readjustment Act of 1944 (the GI Bill) created the VA loan with its funding fee — a one-time charge instead of monthly insurance. USDA Rural Development loans (Housing Act of 1949 §502) charge a 1% upfront guarantee fee plus 0.35% annual fee. Neither uses PMI, but the economics are similar.
For decades, PMI was hard to cancel — borrowers had to call the servicer and hope. President Clinton signed the Homeowners Protection Act on July 29, 1998, codified at 12 U.S.C. §4901-4910. The HPA created three triggers: §503 borrower-request at 80% LTV, §504 automatic termination at 78% LTV, §505 final termination at the midpoint of the loan term regardless of LTV.
FHA MIP went the opposite direction. Pre-2013 FHA loans cancelled MIP at 78% LTV (per HUD Mortgagee Letter 2000-46). The Mutual Mortgage Insurance Fund stress in the wake of the 2008 crisis led HUD to make MIP permanent for new FHA loans with LTV above 90% (effective June 3, 2013 per Mortgagee Letter 2013-04). This is one of the largest differences between FHA and conventional loan PMI economics.
By 2026, the IRC §163(h)(3)(E) PMI deduction had expired (last available tax year 2021, never renewed). The CFPB's Reg Z and Bulletin 2015-03 enforce HPA compliance — servicers who fail to auto-cancel PMI at 78% LTV face significant penalties. This calculator's 78% line is more than visual: it is the legally binding endpoint of the PMI obligation on every conforming loan.
How to read the PMI chart
- Blue curve is your loan balance over time, computed from rate × term.
- Amber dashed line at 80% LTV is HPA §503 — earliest borrower-request right.
- Green dashed line at 78% LTV is HPA §504 — lender must auto-cancel.
- Green dot marks the exact month your blue curve crosses the green line.
- Red shaded area is the total PMI you pay between origination and cancellation.
What loan officers and buyers say
“I send first-time buyers here when they ask about PMI cancellation. The 78% vs 80% LTV distinction trips up everyone — the chart shows it perfectly. HPA 1998 §504 reference is dead on per CFPB compliance guidance.”
“PMI risk-based pricing matrix in the FAQ matches what I see from MGIC and Radian rate cards. The auto-cancellation FAQ saves clients hundreds in unnecessary calls to servicers. Recommend this to everyone shopping a 5-10% down conventional loan.”
“The FHA MIP vs PMI distinction is one I make in every workshop and the FAQ here states it correctly — FHA MIP after 2013 is permanent if LTV > 90%. Many tools get this wrong. The chart visualization is a teaching gem.”
“HPA 1998 §503/§504/§505 distinctions in the FAQ match Reg Z and CFPB Bulletin 2015-03 guidance to the letter. I would happily link this tool from internal training. Mortgage insurance is poorly understood — this fixes that.”
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