A high-ratio mortgage requires default insurance, and that premium is added to your loan balance before you ever make a payment — so you borrow it and pay interest on it for the whole amortization. In the US the same risk is priced as monthly PMI that falls away at 80% LTV. This calculator shows the premium, the payment offset it creates, and which structure costs less for your own numbers.
| Scenario | LTV | UMI Premium | Monthly Offset |
|---|---|---|---|
| $500,000 price, 5% down | 95.0% | $14,725 | +$99/mo |
| $500,000 price, 10% down | 90.0% | $12,600 | +$85/mo |
| $500,000 price, 15% down | 85.0% | $8,075 | +$55/mo |
| $500,000 price, 19.9% down | 80.1% | $7,610 | +$51/mo |
| $500,000 price, 20% down | 80.0% | $0 | $0/mo |
Every row holds the price and rate constant at $500,000 and 6.5%, so the only variable is the down payment. Watch the cliff at 20%: the premium disappears entirely, while 19.9% down still finances $7,610 into the loan.
The premium is a percentage of your base loan, then added to the balance. You do not write a cheque at closing — you borrow it, and you repay it with interest across the full amortization. That is why the payment offset is the number that matters, not the headline premium.
| Loan-to-Value | Premium Rate |
|---|---|
| Up to 80% | 0% (conventional) |
| 80.01% – 85% | 1.90% |
| 85.01% – 90% | 2.80% |
| 90.01% – 95% | 3.10% |
| Above 95% | 4.50% |
Our default case finances a $12,600 premium. Spread flat over 300 payments that would be about $42 a month. The calculator shows an offset of $85 because you are also paying 6.5% interest on the financed premium for the full term. Lengthen the amortization or raise the rate and the offset grows faster than the premium itself.
There is no gradual taper. At 20% down the premium is zero. At 19.9% down you land in the 1.90% band and finance $7,610. That single tenth of a percent of down payment is worth $7,610 in borrowed principal.
No. Both protect the lender rather than you, but they are priced differently. A financed premium is charged once as a percentage of the loan, borrowed at closing, and not refunded if you sell. PMI is a monthly charge that must be removed once your balance reaches 78–80% of the original value. The financed premium usually costs less if you sell within a few years; PMI costs less over a long hold.
Yes, and it is a hard cliff rather than a taper. At exactly 20% down your LTV is 80% and the premium drops to zero. Just below that, at 19.9% down, you still pay the 1.90% band, which on a $500,000 purchase finances $7,610 into the loan.
It increases your debt without increasing the property value, so yes. Our default 10% down case starts at 90% LTV but actually borrows 92.5% of the property value once the $12,600 premium is financed.
It is not refunded. The full premium was financed at closing, so selling in year two means you paid interest on the whole amount for the time you held the loan, and you still repay the outstanding balance that includes it. This is the strongest argument for PMI when you expect to move within five years.
Because the same borrower faces a different structure depending on country, and the trade-off is easier to see side by side. Set the PMI rate to your own quoted rate to compare the financed one-time premium against a monthly charge with a defined exit point.
⚠️ Estimate only. Premium bands vary by insurer, region, and lender, and are revised periodically. This tool models the standard high-ratio premium structure and assumes the premium is fully financed into the loan. It excludes transfer taxes, title insurance, and lender fees. Confirm your actual premium on your lender's disclosure before committing.