Mortgage insurance cost per month

What is private mortgage insurance?

Private mortgage insurance (PMI) is designed to protect a lender in case of a default on the loan. It is generally required by the creditor in case the borrower has less than 20% down payment percent from the home price, which means it is mandatory when the loan amount divided by the property value is greater than 80.00%.

Our PMI calculator takes account of the LTV ratio explained below.

Who pays for private mortgage insurance?

In addition to the principal and interest monthly payments that are made for the loan, the debtor has to pay on a monthly basis the PMI too, which is then transferred by the lender to the mortgage insurance company.

How to calculate PMI?

• Step 1: First of all you should know the purchase price of the home you are about to buy and the down payment value, then establish the amount of money you need to borrow.

• Step 2: Find the loan to value ratio (LTV).

  This indicator can be found by dividing the loan amount borrowed by the property price. This is a very significant figure the lenders take account

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