Private mortgage insurance protects your lender, not you, and on a typical loan it's costing you $100 to $300 every month. The law says it must end eventually, but "eventually" can mean nine years. Here's how each removal route works and how to trigger the fastest one you qualify for.
Put down less than 20% on a conventional loan and the lender adds PMI to cover their risk until you've built enough equity. The cost is a percentage of your loan, typically 0.3% to 1.5% a year depending on your credit score and how little you put down.
Concrete numbers help. Buy a $400,000 home with 10% down and you're borrowing $360,000 at 90% loan-to-value. At a middle-of-the-road 0.55% PMI rate, that's $1,980 a year, or $165 a month, on top of your regular payment. Wait for it to fall off on its own and you'll hand over roughly $18,000 in total. That's the bill we're trying to shrink.
Enter your price, down payment, and rate. See your monthly PMI plus the exact month it hits the 80% and 78% removal thresholds.
PMI Calculator →The Homeowners Protection Act sets two automatic tripwires, both measured against your home's original value (the purchase price or original appraisal, whichever was lower):
On that $360,000 loan at 6.5%, the balance reaches 78% of the original value at about month 109. Nine years of $165 payments if you just wait. Which is why the next option matters.
You don't have to wait for 78%. Once your balance falls to 80% of the original value, you can request cancellation in writing. Your servicer can require a good payment history (no 30-day lates in the past year, no 60-day lates in the past two) and confirmation that the value hasn't dropped, but if you tick those boxes, they should grant it.
The 80% mark arrives at month 95 in our example, about 14 months before the automatic cutoff. One letter saves you roughly $2,300. Watch your statements, and set a reminder for the month your PMI calculator result says you'll cross the line.
Both, and they're the two levers most people underuse.
Extra principal payments move the 80% date directly. Every extra dollar cuts the balance, and the thresholds are balance-based. Even $100 a month extra on the loan above pulls the removal date forward by well over a year, and it saves interest on top. Check what your payment is actually covering each month with a mortgage calculator and you'll see how slowly principal moves in the early years without help.
A reappraisal uses the market instead of your wallet. Most servicers will cancel PMI based on current value if a new appraisal shows your loan at 80% or less, though many require 75% if you've owned less than five years, and Fannie Mae and Freddie Mac have their own seasoning rules. If prices in your area have jumped since you bought, a $300 to $600 appraisal that kills a $165 monthly charge pays for itself before the next billing cycle.
Only when the rest of the refi math works on its own. If your home has appreciated enough that a new loan would sit below 80% LTV, refinancing removes PMI, but it also brings 2% to 6% in closing costs and possibly a different rate. When rates have fallen since you bought, it can be a double win. When rates have risen, you'd be trading a cheap loan for an expensive one to dodge a fee that was going to expire anyway. Keep an eye on your debt-to-income ratio too, since you'll need to qualify for the new loan just like the first time.
Usually yes, with a new appraisal. Most lenders will cancel PMI if a current appraisal puts your loan at or below 80% of today's value, though many require 75% if you've owned the home less than five years. The appraisal costs $300 to $600, which one or two months of PMI typically repays.
Until your balance hits 78% of the original value, which on a 30-year loan with 10% down takes around nine years of scheduled payments. Request removal at 80% and you can cut roughly a year off that. Extra principal payments or rising home values can end it far sooner.
No, and it's a costly difference. FHA loans charge MIP instead of PMI, and if you put down less than 10%, MIP lasts for the life of the loan no matter how much equity you build. The standard exit is refinancing into a conventional loan once you reach 20% equity.