PMI Calculator
Estimate private mortgage insurance cost and loan-to-value from a home purchase scenario.
Calculate PMI
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PMI calculator guide
WeCovr's PMI calculator estimates private mortgage insurance cost from home price, deposit size, and an assumed PMI rate. It helps show how a smaller deposit can increase monthly housing costs.
What PMI is
Private mortgage insurance is commonly charged when a borrower has a higher loan-to-value mortgage and the lender wants extra protection against default.
It can add a noticeable amount to monthly housing cost, especially when the deposit is small.
Usually linked to higher LTV borrowing.
Adds to monthly cost without reducing the loan balance.
Can sometimes be removed once equity improves.
How this calculator works
The calculator estimates loan-to-value from home price and deposit, then applies an annual PMI rate to the loan amount.
It is a simplified model and does not account for lender-specific pricing, borrower profile, or regional rules.
Why PMI matters in affordability
A monthly mortgage payment may look affordable until mortgage insurance is added on top. That is why PMI is worth modelling before you commit to a deposit level.
Sometimes increasing the deposit can reduce both monthly cost and the number of products you need to compare.
Deposit and PMI overview
| Deposit size | Typical LTV effect | PMI impact |
|---|---|---|
| 20% or more | 80% LTV or below | Often not required |
| 10% to 19.9% | Above 80% LTV | Often relevant |
| Below 10% | Higher-risk LTV | PMI can be more significant |
Related WeCovr resources
FAQs
Is PMI always required below 20% deposit?
It is common in many higher-LTV mortgage scenarios, but actual rules depend on the lender, product structure, borrower profile, and market.
Does PMI pay off my mortgage balance?
No. PMI is an insurance cost rather than a capital repayment, so it increases monthly cost without directly reducing the loan.
Can PMI be removed later?
Sometimes yes, particularly when the balance falls or the home's value rises enough to bring LTV down. The process depends on the lender and product.
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