Short answer: expect private mortgage insurance (PMI) to cost roughly 0.3%–1.5% of your loan amount per year, which works out to about $30–$70 a month for every $100,000 you borrow. On a $360,000 loan at a 0.75% rate, that’s $225 a month. Your credit score and down payment size move you up or down within that range.
What PMI costs, in one line
PMI is insurance you pay to protect the lender — not you — on conventional loans with less than 20% down. The annual premium is quoted as a percentage of your loan amount, then divided into 12 monthly payments. Fannie Mae’s education materials put the typical range at 0.3%–1.5% of the loan per year, and Freddie Mac estimates $30–$70 a month per $100,000 borrowed.
For quick mental math: $30/month per $100K equals 0.36% per year; $70/month per $100K equals 0.84% per year — so the two sources agree on the same band.
A worked example with real numbers
Say you’re buying a $400,000 home with 10% down. Your loan amount is $360,000. If your PMI rate is 0.75% per year:
- Annual PMI = $360,000 × 0.0075 = $2,700
- Monthly PMI = $2,700 ÷ 12 = $225
Now try a smaller purchase: a $300,000 home with 5% down means a $285,000 loan. At 0.50% that’s $118.75 a month (round to $119); at 1.00% it’s $237.50 a month. Notice the monthly figure scales exactly with the rate — the only inputs that matter are your loan amount and your premium percentage.
Want to see the full picture with taxes and insurance added? Run the numbers through our Mortgage Calculator and add the PMI estimate to the PITI breakdown.
What moves your rate up or down
Two factors dominate PMI pricing:
1. Your credit score. This is the big one. Urban Institute analysis shows that conventional borrowers putting 3% down with credit scores below 680 pay more than 1% per year, while borrowers with the same down payment and a 760+ score pay less than 0.5%. Moving up a credit band can genuinely save you over $100 a month on an average loan — worth every point.
2. Your down payment size. A 10% down payment produces a lower PMI rate than 5%, and 15% lower still, at any given credit score. Smaller down payments mean more risk for the insurer, and that risk is priced into your premium.
Your loan term and property type matter too (15-year loans get better rates than 30-year; multi-unit properties get worse), but credit score and LTV drive most of the difference.
PMI vs FHA’s MIP
Conventional loans aren’t the only place mortgage insurance appears. FHA loans charge MIP (mortgage insurance premium) instead, with a different structure: a 1.75% upfront premium (usually financed into the loan) plus an annual premium billed monthly — 0.55% per year on most new 30-year loans after the March 2023 cut. Unlike conventional PMI, FHA’s annual MIP typically stays for the life of the loan if you put less than 10% down, and even with 10%+ down it lasts 11 years. That’s why borrowers with decent credit often find conventional + PMI cheaper than FHA over the long run. More on the FHA structure at HUD.
When the monthly charge goes away
PMI is temporary. Under the federal Homeowners Protection Act, on a conventional loan you can request cancellation once your loan-to-value hits 80% of the original value, and your servicer must automatically terminate PMI at 78% — as long as you’re current on payments. A new appraisal showing 80% LTV on the current market value can get it removed even sooner in a rising market. We cover the full removal playbook in How to Avoid PMI, and you can model how extra principal payments shorten the timeline with our Loan Amortization Calculator.
The quick formula
Monthly PMI = (loan amount × annual PMI rate) ÷ 12. Get the actual rate quote from your lender’s Loan Estimate (it’s a line item in the Projected Payments table), plug in your loan amount, and you’ll know your number to the dollar. The Consumer Financial Protection Bureau explains your PMI rights and costs at ConsumerFinance.gov.
Frequently asked questions
How do I calculate my monthly PMI?
Multiply your loan amount by your annual PMI rate (quoted as a percentage), then divide by 12. Example: a $360,000 loan at 0.75% per year = $360,000 × 0.0075 ÷ 12 = $225 per month. Your lender must list the actual premium on your Loan Estimate, so you don’t have to guess.
Is $200 a month for PMI normal?
Yes — it’s solidly in the normal range. On a $250,000 loan, $200 a month equals about 0.96% per year; on a $360,000 loan it equals about 0.67%. Both sit within the typical 0.3%–1.5% band. A $200 charge would be high on a small loan with strong credit, and ordinary on a larger loan with a smaller down payment.
Does a higher credit score lower PMI?
Yes — substantially. PMI insurers price premiums heavily on credit score. Moving from a below-680 score to a 760+ score at the same down payment can cut the annual rate from over 1% to under 0.5%, which can mean a $100+/month difference. If you’re on the edge of a better band, a few months of credit improvement before applying can pay for itself quickly.
How much PMI would I pay on a $300,000 home?
It depends on your down payment and credit score, but a realistic range is $120–$240 a month. With 5% down ($285,000 loan): 0.50% = about $119/month, 0.75% = about $178/month, 1.00% = about $238/month. Your lender’s quote is the only number that matters — treat these figures as a sanity check, not a price.
Reviewed October 2026. Examples computed directly from PMI rate math; actual premiums vary by insurer, lender, and borrower profile. This article is educational content, not financial advice.