It is similar with mortgage insurance. Since measuring the cost of mortgage insurance is more difficult than weighing a potato, I'll show you how to do it. But the measurement is just step one. Step two is deciding what it means for you, which you have to do for yourself. But to help in that, I am also going to show you how to convert the mortgage insurance decision into an investment decision, with which more people are familiar.
Lets take a concrete example.
Change the assumptions and you change the cost. While the insurance premiums are smaller, the incremental loans are also smaller. On smaller loans within the same mortgage insurance premium bracket, the cost is higher. Adjustable rate mortgages have higher insurance premiums, and therefore higher costs, than fixed-rate mortgages. Mortgage insurance costs can be reduced if you manage to get the insurance removed early.