Mortgage Insurance Calculator Formula

Understand the math behind the mortgage insurance calculator. Each variable explained with a worked example.

Use the Mortgage Insurance Calculator

Formulas Used

Conventional PMI Total

conv_total = monthly_pmi * years_to_compare * 12

FHA MIP Total (upfront + annual)

fha_total = fha_ufmip + monthly_fha_mip * years_to_compare * 12

USDA Fee Total (upfront + annual)

usda_total = usda_ufmip + monthly_usda * years_to_compare * 12

Conventional Monthly PMI

conv_monthly = monthly_pmi

FHA Monthly MIP

fha_monthly = monthly_fha_mip

USDA Monthly Fee

usda_monthly = monthly_usda

Variables

VariableDescriptionDefault
loan_amountLoan Amount(USD)300000
home_valueHome Value(USD)333333
pmi_annual_rateConventional PMI Rate (annual)(%)0.55
fha_annual_mipFHA Annual MIP Rate(%)0.55
fha_ufmip_rateFHA UFMIP Rate(%)1.75
years_to_compareComparison Period(years)10
ltvDerived value= loan_amount / home_value * 100calculated
monthly_pmiDerived value= loan_amount * pmi_annual_rate / 100 / 12calculated
fha_ufmipDerived value= loan_amount * fha_ufmip_rate / 100calculated
monthly_fha_mipDerived value= loan_amount * fha_annual_mip / 100 / 12calculated
usda_ufmipDerived value= loan_amount * 0.01calculated
monthly_usdaDerived value= loan_amount * 0.0035 / 12calculated

How It Works

Comparing Mortgage Insurance Types

Different loan programs have different insurance structures. Understanding the total cost helps choose the most affordable option.

Conventional PMI

  • Rate: 0.3% to 1.5% annually based on LTV and credit
  • No upfront fee
  • Drops off at 80% LTV (can request) or 78% LTV (automatic)

    • FHA MIP

  • Upfront: 1.75% of loan amount (usually financed)
  • Annual: 0.15% to 1.05% depending on term, LTV, and amount
  • Required for life of loan if down payment < 10%

    • USDA Guarantee Fee

  • Upfront: 1.0% of loan amount
  • Annual: 0.35% of loan amount
  • Required for life of loan

    • Worked Example

    A $300,000 loan on a $333,333 home (90% LTV). Compare over 10 years.

    loan_amount = 300000home_value = 333333pmi_annual_rate = 0.55fha_annual_mip = 0.55fha_ufmip_rate = 1.75years_to_compare = 10
    1. 01LTV: $300,000 / $333,333 = 90%
    2. 02Conventional PMI: $300,000 x 0.55% / 12 = $137.50/month
    3. 03Conventional 10-year total: $137.50 x 120 = $16,500
    4. 04FHA UFMIP: $300,000 x 1.75% = $5,250
    5. 05FHA monthly MIP: $300,000 x 0.55% / 12 = $137.50/month
    6. 06FHA 10-year total: $5,250 + ($137.50 x 120) = $21,750
    7. 07USDA upfront: $300,000 x 1% = $3,000
    8. 08USDA monthly: $300,000 x 0.35% / 12 = $87.50/month
    9. 09USDA 10-year total: $3,000 + ($87.50 x 120) = $13,500

    Frequently Asked Questions

    Which loan type has the cheapest mortgage insurance?

    USDA loans typically have the lowest mortgage insurance cost (1% upfront + 0.35% annual). Conventional PMI varies widely by credit score but can be competitive, especially since it drops off at 80% LTV. FHA MIP tends to be the most expensive over the loan life due to the upfront fee and lifetime duration.

    Can I cancel FHA mortgage insurance?

    With less than 10% down, FHA MIP lasts the life of the loan. Your only option is to refinance into a conventional loan once you reach 80% LTV. With 10% or more down, MIP drops after 11 years.

    Does PMI cost depend on my credit score?

    Yes, significantly. A borrower with a 760+ credit score might pay 0.3% annually, while a borrower with a 680 score might pay 0.8% or more. Improving your credit score before buying can save thousands in PMI costs.

    Ready to run the numbers?

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