Down Payment vs PMI Calculator

Compare 20% down (no PMI) with a smaller down payment plus PMI on the same property. See monthly payment, total PMI paid until cancellation, and the cash freed up by the smaller down payment.

Property price

Smaller down payment

PMI annual rate

Rate

Term (years)

Months until PMI cancels

Extra cash for 20% down

$45,000

vs 10% down

Monthly with smaller down + PMI

$2,880

PMI portion: $186

Monthly with 20% down

$2,395

$485/mo less

Total PMI paid until cancel

$15,593

84 months

How to think about it

Bigger down payment = lower payment forever. PMI cancels eventually but the smaller loan stays smaller for the full term. The trade-off: the $45,000 you'd put down differently is no longer available for emergencies, investments, or other goals.

A practical rule: take the smaller down payment if your alternative use of the cash earns more than the after-tax cost of the mortgage and PMI combined. Take the bigger down payment if you're rate-sensitive, near the affordability ceiling, or just want lower fixed costs.

How to Use

Enter the property price.
Enter the smaller down payment percent you're considering (e.g., 5%, 10%).
Enter the PMI annual rate quoted to you.
Enter rate, term, and the months until you expect PMI to cancel (commonly 60–120 based on amortization or value increase).
Compare monthly payments and decide whether the cash freed up justifies paying PMI.

Frequently Asked Questions

When does PMI come off?

Federal law requires automatic PMI termination at 78% LTV based on the original amortization schedule. You can request cancellation at 80% based on either original or current value. Some loans (FHA MIP) require it for the life of the loan.

How much does PMI cost monthly?

Typically 0.30–1.50% of the loan annually, divided by 12. On a $400k loan at 0.55%, that's about $183/month until cancellation. Higher LTV and lower credit score push the rate up.

Does putting 20% down always save money?

On a payment-only basis, yes — no PMI plus a smaller loan. But the larger down payment ties up cash that could have been invested or held as reserves. The right choice depends on your alternative use for that cash.

What about lender-paid PMI?

Some lenders offer LPMI: they pay PMI in exchange for a slightly higher rate (often 0.25–0.50%). LPMI doesn't cancel — it stays for the life of the loan via the higher rate. Run the numbers carefully if you'll refinance soon.