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Methodology

Last reviewed: upon publication. Rates are reviewed periodically as sources update.

Complete disclosure of how our calculators compute PMI, FHA MIP, VA funding fees, and USDA guarantee fees. Nothing is hidden in a black box.

Most online mortgage calculators give you a number without showing their work. We publish our exact rate tables, formulas, and data sources so you can verify everything yourself and understand the limits of what we can calculate.

Core formula

All PMI, FHA MIP, and USDA annual fee calculations use the same basic structure:

Monthly premium = (Loan amount × Annual rate) ÷ 12

The complexity is in determining the annual rate, which depends on loan type, credit score, loan-to-value ratio, property type, occupancy, and loan amount. Each loan program is handled below.

Loan-to-value (LTV) buckets

Private mortgage insurers price risk in LTV bands. We follow the industry-standard boundaries used by MGIC, Radian, and Essent: 95.01% to 97% is the highest-risk bucket with the highest rates, followed by 90.01% to 95%, then 85.01% to 90%, and finally 80.01% to 85% which is the lowest PMI bucket. Below 80% LTV, no PMI is required at all.

Note the strict boundary: exactly 95.00% LTV falls into the 90-95 bucket, not 95-97. This matches industry convention.

Conventional PMI rate table

These are the annual rates (as percentages of loan amount) used in our calculator. They are a composite estimate based on publicly available rate card patterns from MGIC Risk-Based Pricing, Radian Rate Card, and Essent Guaranty. Actual rates from any specific lender will vary.

Property type and occupancy surcharges

We multiply the base PMI rate by surcharges that approximate real industry loan-level price adjustments. Property type multipliers are 1.00× for single-family home and townhouse (no surcharge), 1.15× for condo, 1.30× for 2-4 unit multi-family, and 1.20× for manufactured home. Occupancy multipliers are 1.00× for primary residence, 1.10× for second home, and 1.30× for investment property.

A note on investment properties: most conventional lenders do not offer PMI on investment properties at any price. They require 20% down minimum. Our calculator allows the input for completeness, but you should verify availability with lenders.

FHA MIP rates

FHA Mortgage Insurance Premium rates come from HUD Mortgagee Letter 2023-05, which remains in effect as of this writing. Both an upfront fee of 1.75% of loan (added to balance at closing) and an annual premium apply.

Annual MIP rate (loans longer than 15 years)

For loans at or below $766,550 the standard loan limit, annual MIP is 0.55% when LTV is above 95%, or 0.50% when LTV is at or below 95%. For high-balance loans above $766,550, annual MIP is 0.75% when LTV is above 95%, or 0.70% when LTV is at or below 95%.

Annual MIP rate (loans 15 years or shorter)

For standard-balance loans, annual MIP is 0.40% when LTV is above 90%, or 0.15% when LTV is at or below 90%. For high-balance loans, annual MIP is 0.65% above 90% LTV, 0.40% between 78% and 90% LTV, and 0.15% at or below 78% LTV.

MIP duration

If original LTV is at or below 90%, MIP cancels automatically after 11 years. If original LTV is above 90%, MIP applies for the full loan term; the only way to end it is to refinance to a conventional loan after reaching 80% LTV.

VA funding fee

VA funding fees come from U.S. Department of Veterans Affairs published schedules. Our calculator uses first-use rates by default. For first-use, the funding fee is 2.15% of loan if down payment is less than 5%, 1.50% if down payment is 5% to 9.99%, and 1.25% if down payment is 10% or more.

What we do not currently model: subsequent-use rates (which are 3.30% at 0% down, 1.50% at 5 to 9%, and 1.25% at 10% or more), disability exemption (veterans with service-connected disabilities pay no funding fee), Native American Direct Loan fees, and Interest Rate Reduction Refinance Loan fees. For these specific cases, verify with a VA-approved lender.

USDA guarantee fee

USDA Section 502 Guaranteed Loan Program fees per current USDA Rural Development guidelines: upfront guarantee fee is 1.00% of loan (financed into balance), and annual guarantee fee is 0.35% of loan amount (declining balance in reality, but we use a simplified fixed-balance calculation). Duration is the full loan term; the fee does not cancel.

Principal and interest calculation

Standard mortgage amortization formula:

P&I = L × (r × (1+r)^n) / ((1+r)^n - 1)

Where L is loan amount, r is monthly interest rate (annual rate divided by 12), and n is total months (years multiplied by 12).

Months to PMI drop-off calculation

For conventional PMI, federal law (Homeowners Protection Act of 1998) requires automatic cancellation when the scheduled loan balance reaches 78% of the original home value. We compute the exact month using a closed-form solution of the amortization equation:

n = ln((PMT/r - target) / (PMT/r - loan)) / ln(1+r)

Where PMT is monthly payment, r is monthly rate, target is original home value times 0.78, and loan is original loan amount. The result is rounded up to the next whole month.

What we do not account for

Our calculators are estimators, not full mortgage underwriting engines. Several real-world factors are not modeled: debt-to-income ratio adjustments, cash reserve discounts, first-time buyer programs like Home Possible and HomeReady, state-level pricing adjustments, lender-specific rate card variations, promotional pricing, and jumbo loan treatment above conforming limits. The practical result: your actual PMI quote from a lender may differ from our estimate by 10 to 25% in either direction.

Update approach

We review rate tables and underlying data on a best-effort basis. Our goal is to review conventional PMI rate tables against current publicly available insurer rate cards at least once per quarter, review FHA MIP tables against the latest HUD Mortgagee Letter at least once per year, review VA funding fee schedules against VA publications at least once per year, review USDA guarantee fee rates at least once per year, and apply mid-cycle updates when a government agency publishes a material change. As a small independent site we cannot guarantee a fixed schedule, but we aim to keep rates reasonable and current. The "last reviewed" date at the top of each page reflects the most recent review.

Data sources

Our sources include MGIC Risk-Based Pricing publicly available rate card patterns, Radian Rate Card publicly available pricing matrix, Essent Guaranty publicly available rate tables, HUD Mortgagee Letter 2023-05 for FHA MIP rate schedule, U.S. Department of Veterans Affairs current VA funding fee schedule, USDA Rural Development Section 502 Guaranteed Loan Program guidelines, Homeowners Protection Act of 1998 (12 U.S.C. § 4901) for automatic PMI cancellation requirements, and Fannie Mae and Freddie Mac Selling Guide standards for conforming conventional loans.

Open methodology, open corrections

If you find an error in any of our rates, formulas, or claims, we want to know. Reach out through our contact page and we fix verified errors within one week. Transparency is only useful if it is honest.

Limitations we acknowledge

No online calculator can replace an actual Loan Estimate from a licensed lender. Our calculator exists to help you understand the mechanics of PMI, estimate your approximate monthly cost, and know what questions to ask when you are shopping for a mortgage. It cannot and does not replace an official Loan Estimate (required by law within 3 business days of a complete application), guarantee the rate you will be quoted, account for your complete financial profile, or serve as the basis for a legal or financial decision.

For any real mortgage decision, work with a licensed professional and verify every number against actual loan documents. See our full disclaimer for more.