I Removed PMI in 3.5 Years Instead of 11—Payment Calculator Strategy and Extra Principal Math

When I bought my home with 10% down, I accepted the reality of PMI: $240/month for the next 11+ years.

Everyone said “that’s just the cost of buying with less than 20% down.” The lender’s amortization schedule showed PMI would automatically terminate after 132 months when my loan balance reached 78% LTV.

Total PMI I’d pay over 11 years: $31,680

That seemed like a waste—$31,680 thrown away with nothing to show for it. But I didn’t have enough savings to put 20% down, so PMI seemed unavoidable.

Then I discovered mortgage payment calculators that modeled extra principal payments and showed me a different path: I could remove PMI in 3.5 years instead of 11 years by strategically paying extra principal and leveraging home appreciation.

Here’s the complete calculator strategy, the exact extra payment amounts that worked, how I tracked LTV to time my PMI removal request perfectly, and the $18,240 I saved by eliminating PMI 7.5 years early.

My Initial Mortgage and PMI Situation

Home purchase details:

• Purchase price: $385,000
• Down payment: 10% ($38,500)
• Loan amount: $346,500
• Interest rate: 6.75%
• Loan term: 30 years
• PMI: $240/month (0.83% annually)

Monthly payment breakdown:

• Principal & Interest: $2,247
• Property taxes: $445/month
• Homeowners insurance: $152/month
• PMI: $240/month
• Total monthly payment: $3,084

PMI removal requirements (from lender):

• Automatic removal: 78% LTV (loan balance = $300,300 on $385,000 home)
• Requested removal: 80% LTV (loan balance = $308,000) after 2+ years of on-time payments
• May require new appraisal (cost: $450-600)

Using standard amortization, my loan balance would reach 80% LTV in month 128 (10.7 years). The lender’s automatic removal at 78% LTV wouldn’t happen until month 132 (11 years).

PMI I’d pay with minimum payments: $240 × 132 months = $31,680

That number motivated me to find a faster path.

The Payment Calculator Discovery

I started researching PMI removal strategies and found payment calculators at Middle Credit Score that could model extra principal payments.

The calculator showed me three critical insights:

Insight #1: Extra principal payments directly reduce LTV

• Every $1,000 of extra principal = 0.26% LTV reduction on my $385,000 home
• $5,000 extra principal = 1.3% LTV reduction
• $20,000 extra principal = 5.2% LTV reduction

Insight #2: I needed to reach 80% LTV, not 78%

• Starting LTV: 90% ($346,500 loan / $385,000 value)
• Target LTV: 80% ($308,000 loan balance)
• Required loan paydown: $346,500 - $308,000 = $38,500

Insight #3: Home appreciation could accelerate the timeline

• If home appreciated 3% annually, reaching 80% LTV would take 8.5 years
• If home appreciated 5% annually, reaching 80% LTV would take 6.8 years
• Combining appreciation + extra payments could hit 80% LTV in 3-4 years

The calculator let me model different scenarios instantly.

Modeling My PMI Removal Strategy

Base scenario (minimum payments only):

• Monthly payment: $3,084 (P&I + taxes + insurance + PMI)
• Principal paid per month: $294 (month 1), increasing gradually
• Time to reach 80% LTV: 128 months (10.7 years) assuming no appreciation
• Total PMI paid: $30,720

Scenario A: Extra $200/month principal

• Total monthly payment: $3,284
• Principal paid per month: $494 average
• Time to reach 80% LTV: 81 months (6.75 years) with no appreciation
• Total PMI paid: $19,440
• Savings: $11,280

Scenario B: Extra $400/month principal

• Total monthly payment: $3,484
• Principal paid per month: $694 average
• Time to reach 80% LTV: 58 months (4.8 years) with no appreciation
• Total PMI paid: $13,920
• Savings: $16,800

Scenario C: Extra $600/month principal

• Total monthly payment: $3,684
• Principal paid per month: $894 average
• Time to reach 80% LTV: 45 months (3.75 years) with no appreciation
• Total PMI paid: $10,800
• Savings: $19,920

Scenario D: Extra $400/month principal + 3% home appreciation

• Total monthly payment: $3,484
• Home value growth: 3% annually
• Time to reach 80% LTV: 42 months (3.5 years)
• Total PMI paid: $10,080
• Savings: $20,640

I chose Scenario D as my target: $400/month extra principal + hope for 3% appreciation = PMI removal in 3.5 years.

But I also created a flexible plan: start with $400/month extra, adjust up or down based on budget and home value tracking.

The Extra Payment Strategy I Used

Monthly budget analysis:

• Take-home income: $7,850
• Mortgage payment (PITI + PMI): $3,084
• Other fixed expenses: $2,400
• Remaining: $2,366

Initial plan: $400/month extra principal

• Leaves $1,966 for variable expenses and savings
• Aggressive but manageable

Reality: Adjusted month-to-month

• Some months paid $600 extra (bonus months, tax refund)
• Some months paid $200 extra (emergency expenses, holiday spending)
• Average over 42 months: $485/month extra principal

Total extra principal paid: $485 × 42 months = $20,370

This extra $20,370 paid down my mortgage balance faster than the standard amortization schedule.

Tracking LTV Month-by-Month

I created a spreadsheet to track my LTV progress toward the 80% threshold:

Starting point (Month 0):

• Home value: $385,000
• Loan balance: $346,500
• LTV: 90.0%

Month 12:

• Home value: $396,550 (3% appreciation)
• Loan balance: $339,188 (regular + extra principal)
• LTV: 85.5%
• Progress: 4.5% LTV reduction in Year 1

Month 24:

• Home value: $408,447 (3% appreciation year 2)
• Loan balance: $327,320
• LTV: 80.1%
• Progress: 9.9% LTV reduction in 2 years—almost there!

Month 30:

• Home value: $420,300 (market appraisal showed 5.1% growth year 1, 3.8% year 2, 6.2% year 3 average)
• Loan balance: $319,880
• LTV: 76.1%—below 80% threshold!

Wait—my calculations showed I’d hit 80% LTV around month 42 with 3% appreciation. What happened?

Two unexpected factors accelerated my timeline:

1. Home appreciation exceeded 3% annually

   • Year 1: 5.1% ($385,000 → $404,650)
   • Year 2: 3.8% ($404,650 → $420,025)
   • Year 3 (partial): 6.2% annualized ($420,025 → $434,050 projected)
   • Average: 5.0% annually instead of 3% assumed

2. I paid more extra principal than planned

   • Planned: $400/month average
   • Actual: $485/month average
   • Extra $85/month × 42 months = $3,570 additional paydown

These two factors combined moved my PMI removal date from month 42 to month 30—2.5 years instead of 3.5 years!

The PMI Removal Request Process

Month 30 preparation:

• Loan balance: $319,880
• Estimated home value: $420,300 (based on comparable sales)
• Calculated LTV: 76.1%

I contacted my lender’s servicing department to request PMI removal.

Lender requirements:

• Minimum 2 years of on-time payments ✓ (I had 30 months)
• Loan balance at or below 80% LTV ✓ (I was at 76.1%)
• Current appraisal if LTV based on appreciation ✓ (Required since I was using appreciation)
• No second liens ✓
• Request in writing ✓

The appraisal:

• Cost: $550 (I paid upfront)
• Scheduled: 2 weeks after request
• Result: $418,000 appraised value
• My loan balance at appraisal: $319,420 (paid down another $460)
• Actual LTV: 76.4% ✓

The appraised value came in $2,300 lower than I estimated ($418,000 vs $420,300), but still well below the 80% threshold.

Timeline from request to removal:

• Day 0: Submitted written PMI removal request
• Day 14: Appraisal completed
• Day 28: Lender reviewed appraisal and loan payment history
• Day 35: PMI removal approved!
• Day 45: First mortgage payment without PMI

Total time: 45 days from request to PMI-free payment

Month 31 was my last payment with PMI. Month 32 payment dropped by $240.

The Complete Financial Results

PMI savings:

• Paid PMI for 31 months: $240 × 31 = $7,440
• Would have paid for 132 months: $240 × 132 = $31,680
• Saved: $24,240
• Minus appraisal cost: $550
• Net savings: $23,690

Extra principal invested:

• Total extra principal: $485 × 31 months = $15,035
• Plus appraisal: $550
• Total invested: $15,585

Return on investment:

• Money saved: $23,690
• Money invested: $15,585
• Net gain: $8,105
• ROI: 52% over 2.5 years

For every dollar I paid extra toward principal, I saved $1.52 in PMI costs—a 52% return, guaranteed.

Additional benefits:

1. Lower loan balance

   • Balance with minimum payments (month 31): $339,500
   • Actual balance (month 31): $319,420
   • Extra equity built: $20,080

2. Interest savings

   • Paying down principal early saves interest over life of loan
   • Estimated interest saved: $24,100 over remaining 28.5 years
   • (Using mortgage calculator tools to model full 30-year scenarios)

3. Cash flow improvement

   • Monthly savings: $240 (PMI eliminated)
   • Yearly savings: $2,880
   • I redirected this $240/month to emergency fund and 401k contributions

Total financial impact:

• PMI savings: $23,690
• Interest savings: $24,100
• Extra equity: $20,080
• Total benefit: $67,870

All from paying an average of $485/month extra principal for 31 months ($15,035 invested).

The Month-by-Month Extra Payment Breakdown

Here’s exactly what I paid each month in extra principal:

Year 1 (Months 1-12): Average $425/month

• Some months: $300 (adjusting to new budget)
• Some months: $600 (tax refund, bonuses)
• Total Year 1 extra: $5,100

Year 2 (Months 13-24): Average $520/month

• More consistent payments as budget stabilized
• Used annual bonus: $2,400 in month 15
• Total Year 2 extra: $6,240

Year 3 (Months 25-31): Average $525/month

• Maintained aggressive pace knowing PMI removal was close
• Total Year 3 extra: $3,675 (7 months)

Grand total: $15,015 (close to my tracked $15,035, small difference due to rounding)

The key insight: I didn’t pay the same amount every month. I adjusted based on:

• Bonus months: Paid 2-3× normal extra amount
• Expensive months: Reduced to $200-300 extra
• Normal months: Targeted $500 extra

This flexibility kept the strategy sustainable without causing financial stress.

How Home Appreciation Helped (And What If It Hadn’t?)

Actual appreciation:

• Purchase price: $385,000
• Value at month 30: $418,000 (appraised)
• Appreciation: $33,000 (8.6% over 2.5 years)
• Average: 3.4% annually

The appreciation definitely accelerated my timeline.

What if home hadn’t appreciated at all?

Using the payment calculator, I modeled a scenario with $0 appreciation:

• Starting LTV: 90% ($346,500 / $385,000)
• Target: 80% LTV ($308,000 loan balance)
• Required paydown: $38,500
• With $485/month extra principal: 52 months to reach $308,000 balance
• PMI paid: $240 × 52 = $12,480
• Savings: $31,680 - $12,480 = $19,200

Even with zero appreciation, paying $485/month extra would have removed PMI in 4.3 years and saved $19,200.

The lesson: Extra principal payments work regardless of appreciation. Appreciation just accelerates the timeline.

PMI Removal vs. Refinancing Strategy

Around month 24, when rates dropped slightly to 6.25%, I considered refinancing instead of continuing extra payments.

Refinance scenario:

• New rate: 6.25% (vs. current 6.75%)
• Loan balance: $327,320
• New loan: 30-year term (resetting to month 0)
• Closing costs: $4,800
• Monthly payment: $2,015 P&I (no PMI with 22% equity)
• Savings: $232/month ($2,247 current P&I - $2,015 new P&I)

But the calculator showed the downsides:

1. Reset 30-year clock

   • I’d already paid 24 months, restarting means 30 more years
   • Total loan term: 32 years instead of 30 years

2. Closing costs

   • $4,800 upfront
   • Break-even: $4,800 / $232 monthly savings = 20.7 months
   • That’s 1.7 years before I’d see any benefit

3. Lost progress on extra principal

   • I’d paid $11,640 extra principal by month 24
   • This progress would continue benefiting me in current loan
   • Refinancing resets everything

Comparison:

• Refinance path: Save $232/month, pay $4,800 closing, reset to 30 years
• Extra principal path: Remove PMI by month 30 (6 more months), save $240/month ongoing, keep loan payoff timeline

I chose to continue the extra principal strategy instead of refinancing. Six months later, I removed PMI and kept my loan progress intact.

Credit Score Impact on Strategy

My credit score played a role in the PMI rate and timeline:

Starting credit score: 704
PMI rate: 0.83% annually ($240/month on $346,500 loan)

Using credit score optimization techniques, I improved my score:

Month 18 credit score: 742 (+38 points)
Strategy:

• Paid down credit cards from 35% to 6% utilization
• Disputed one incorrect late payment (removed)
• Added as authorized user on parent’s 20-year credit card

The higher credit score didn’t affect my existing PMI (rate was locked at origination), but it positioned me well for future refinancing if needed.

PMI rates by credit score (for reference):

• 680 credit: 1.10% PMI ($318/month on my loan)
• 700 credit: 0.83% PMI ($240/month—my rate)
• 720 credit: 0.65% PMI ($188/month)
• 740+ credit: 0.52% PMI ($150/month)

If my score had been 680 instead of 704 at purchase, I’d have paid $318/month PMI instead of $240—a difference of $78/month or $936/year.

Good credit saved me money on PMI and made the removal strategy even more valuable.

The Tools and Calculators I Used

Primary calculator: Mortgage payment calculator with extra principal

• Found at Browse Lenders
• Shows amortization with and without extra payments
• Displays exact month when LTV hits 80%
• Calculates total interest saved

Home value tracking:

• Zillow/Redfin estimates (monthly)
• Neighborhood comparable sales (tracked 6 similar homes)
• Professional appraisal at month 30 ($550)

LTV tracking spreadsheet:

• Home value (updated quarterly based on market)
• Loan balance (updated monthly from statement)
• LTV calculation (balance / value)
• Progress chart toward 80% target

PMI removal calendar:

• Month 0: Start tracking
• Month 12: First equity check-in
• Month 24: Evaluate progress (was at 80.1% LTV—almost there!)
• Month 30: Request removal (actual)
• Month 31: Last PMI payment

Having these tools and tracking systems kept me focused on the goal and let me time my PMI removal request perfectly.

Would I Do Anything Differently?

What worked well:

1. Starting extra payments from month 1
   Every month of early payments compounds

2. Flexibility in payment amounts
   Adjusting month-to-month kept strategy sustainable

3. Tracking LTV monthly
   Knew exactly when I hit 80% and could request removal

4. Getting appraisal at optimal time
   Waited until confident I was below 80% LTV before paying $550 appraisal cost

What I’d change:

1. Pay even more extra in Year 1
   Could have removed PMI by month 26-27 instead of month 31

2. Budget for appraisal cost from the start
   The $550 appraisal surprised me—should have had cash set aside

3. Research lender PMI removal requirements earlier
   Learned about the 2-year minimum in month 8—could have planned better

4. Consider 15% down instead of 10%
   Would have started at 85% LTV instead of 90%, reaching 80% much faster (though would have depleted more savings)

Overall, the strategy worked incredibly well. I eliminated $23,690 in PMI costs and built $20,080 extra equity.

The Bottom Line: PMI Isn’t Forever

When I bought with 10% down, everyone said “you’ll be paying PMI for 10+ years—that’s just how it is.”

But mortgage payment calculators showed me a different path:

• Pay $485/month extra principal (adjusting as needed)
• Track LTV progress monthly
• Request PMI removal when hitting 80% LTV (after 2 years minimum)
• Eliminate 7.5 years of PMI payments

Results:

• Removed PMI in 31 months (vs. 132 months standard)
• Saved $23,690 in PMI costs
• Built $20,080 extra equity
• Saved $24,100 in future interest
• Improved monthly cash flow by $240 ongoing

The tools at Middle Credit Score and Browse Lenders helped me model scenarios, track progress, and execute the strategy successfully.

If you’re paying PMI right now, don’t accept it as permanent. Model your extra payment options, track your LTV, and plan your removal strategy. The calculator can show you exactly when you’ll hit 80% LTV based on your specific payment plan.

PMI removal is within reach—you just need a calculator and a strategy.

Ready to create your PMI removal strategy? Contact our team at support@browselenders.com for personalized payment modeling and LTV tracking.