FHA Loan PMI Breakeven Calculator

Analyze whether a larger down payment is worth the upfront cost compared to paying monthly mortgage insurance (PMI/MIP).

Home Purchase Price

Current Down Payment (%)

Target Down Payment (%)

Interest Rate (%)

Annual PMI/MIP Rate (%)

Loan Term (Years)

Additional Upfront Cost

Monthly Savings

Breakeven Period

0 Months

Cumulative Cost Comparison

Lower Down Payment

Higher Down Payment

Understanding the PMI Breakeven Point

When you put less than 20% down on a home, lenders typically require Private Mortgage Insurance (PMI) or Mortgage Insurance Premium (MIP for FHA loans). This insurance protects the lender, not the borrower, and adds a monthly cost to your mortgage.

The Breakeven Point is the moment when the total amount you saved in monthly payments (by putting more money down) equals the extra cash you spent upfront to reach that higher down payment percentage.

Key Considerations:

Opportunity Cost: This calculator looks at raw cash. It does not account for the interest you could have earned by investing that extra down payment in the stock market.
Equity: A higher down payment gives you immediate equity in your home, reducing the risk of being "underwater" if home prices drop.
FHA vs Conventional: FHA loans often have an upfront MIP fee added to the loan balance, which this simplified tool calculates based on the monthly premium impact.