How this number is made
Private mortgage insurance is a yearly rate on the loan, billed monthly, until the balance is low enough relative to value. The rate is an input because insurers price credit and the loan type.
- Use the premium rate from the quote, often a fraction of a percent.
- Value is what the insurer or servicer will use, which may not be today’s hopeful price.
Formula
Monthly insurance = loan × annual rate ÷ 12. The 80% month is the first scheduled month where the balance is at or under 80% of the value you typed.
Worked example
With the figures already in the form, mortgage insurance per month is $180.00.
Questions
Does it fall off automatically?
On many conventional loans the servicer must drop the premium once the scheduled balance hits 78% of the original value, and you can ask at 80% if you are current. FHA mortgage insurance follows different rules. This page only finds the 80% month.
Can I get rid of it with a new appraisal?
Sometimes, if the servicer accepts a higher value. This page does not model that request. Type the value you think they will accept.