PMI Calculator
Is Putting 20% Down Worth It?
If you put down less than 20% when buying a home, banks charge you an extra monthly fee called PMI (Private Mortgage Insurance). It protects the bank, not you. The common advice is “save up 20% to avoid it.” But is that actually the best move?
What this tool does: Compares two paths side by side. Path A: buy now with less money down and pay PMI. Path B: wait until you have 20% and skip the fee. It calculates which option leaves you with more money.
What you’ll need: A home price, your down payment percentage, and how long you plan to stay.
The surprising answer: In many cases, buying sooner with less down — even with PMI — builds more wealth than waiting. This tool shows you exactly when that’s true and when it’s not.
S&P 500 historical avg: ~10%
7 years
PMI Drops Off
August 2035 · when balance hits $390,000
Monthly PMI: $206 · Total PMI paid: $23,100
10% Down (Your Plan)
20% Down (No PMI)
Lower down payment wins by $7,189
Keeping $50,000 invested at 7% over 7 years earns $30,289 in growth — more than the $23,100 you'd pay in PMI. The invested difference wins.
Break-even investment return: 5.6%— above this rate, lower down payment wins
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PMI rates vary by lender and credit score. This calculator uses a 0.55% annual rate as an estimate. Investment returns are not guaranteed — past performance does not predict future results.