How to Remove PMI From Your Mortgage
Last updated: October 2026 · Editorial standards
Private mortgage insurance (PMI) is a significant monthly cost — but it’s not permanent. Once you’ve built enough equity in your home, you have the right to have it removed. Here’s exactly how to do it.
The Two Ways PMI Ends
1. Automatic Cancellation (Required by Law)
Under the Homeowners Protection Act (HPA), your lender must automatically cancel PMI when your loan balance reaches 78% of the original purchase price — as long as you’re current on payments.
Key point: this is based on the original purchase price, not the current market value. Even if your home has appreciated significantly, automatic cancellation kicks in based on your amortization schedule.
Example: You buy a $350,000 home with 10% down ($315,000 loan). PMI automatically cancels when your balance reaches $272,300 (78% of $350,000), which may take 7–10 years at normal payment pace.
2. Borrower-Requested Cancellation
You can request PMI cancellation earlier — when your loan balance reaches 80% of the original purchase price — if you meet certain conditions.
To request cancellation:
- Your loan must be current (no 30-day late payments in the past 12 months, no 60-day late payments in the past 24 months)
- You may need to demonstrate that the property value hasn’t declined
- Some lenders require a new appraisal
This gets you to PMI cancellation faster than waiting for automatic termination.
Using Home Appreciation to Remove PMI Faster
If your home’s value has increased significantly, you may be able to remove PMI based on the current value rather than the original purchase price — but this requires more steps.
The process:
- Order a new appraisal (at your expense, typically $300–$700)
- If the appraisal shows your current LTV is 80% or below, request PMI cancellation
- Your lender will review and (if approved) cancel PMI
Not all lenders allow this. Requirements vary:
- Many require the loan to be at least 2 years old
- Some require 5 years before allowing appraisal-based cancellation
- The LTV threshold may be 75–80% depending on lender policy
Check your loan servicer’s guidelines before paying for an appraisal.
Making Extra Payments to Build Equity Faster
The most straightforward way to eliminate PMI sooner: pay down your principal faster.
Options:
- Extra monthly payments: Add even $100–$200/month to principal
- One extra payment per year: Accelerates payoff significantly
- Lump sum payments: Apply tax refunds, bonuses, or windfalls to principal
- Biweekly payments: Paying half your mortgage every two weeks results in one extra full payment per year
Use a mortgage calculator to see exactly how much extra you’d need to pay to reach 80% LTV by a specific date.
Refinancing to Eliminate PMI
If interest rates are favorable and home values have risen, refinancing into a new loan can eliminate PMI. When you refinance, the lender uses the current appraised value — if your equity is now 20%+, no PMI is required.
When refinancing makes sense:
- Interest rates are equal to or lower than your current rate
- You have at least 20% equity based on current value
- The closing costs are recoverable within your time horizon
Step-by-Step: Requesting PMI Cancellation
- Check your loan balance: Log into your servicer’s portal or call them
- Calculate your LTV: Divide current balance by original purchase price
- Confirm eligibility: Verify no late payments in the past 12–24 months
- Submit a written request: Contact your loan servicer in writing requesting PMI cancellation
- Provide supporting documentation: Current appraisal if required
- Confirm cancellation: Get written confirmation that PMI has been removed and your new payment amount
How Much Will You Save?
On a $300,000 loan with PMI at 0.8%: $2,400/year or $200/month. Removing PMI earlier by making extra payments or leveraging appreciation can save thousands.
Key Takeaways
PMI isn’t permanent — know your rights. At 80% LTV, you can request cancellation. At 78% LTV, the lender must cancel it automatically. If your home has appreciated substantially, an appraisal can help you get there faster.
Frequently Asked Questions
Does PMI cancellation happen automatically? Yes — at 78% LTV based on the original purchase price and amortization schedule, lenders must cancel automatically. But you can request it earlier at 80% LTV.
What if my lender refuses to cancel PMI? File a complaint with the Consumer Financial Protection Bureau (CFPB) if you believe you qualify and your lender is wrongfully refusing. The Homeowners Protection Act gives you legal rights.
How long does PMI cancellation take once requested? Typically 30–60 days after a complete request is submitted.
Is FHA MIP removed the same way? No. FHA mortgage insurance premium (MIP) rules are different and more restrictive — for most FHA loans originated after 2013, MIP lasts the life of the loan. Removing it typically requires refinancing into a conventional loan.
