Educational guide · PMI
How to cancel PMI (Private Mortgage Insurance)
PMI (Private Mortgage Insurance) protects the lender when your down payment was less than 20%. It doesn't protect you — but you can cancel it once you meet certain requirements. That can be hundreds of dollars a month you stop paying.
When can you cancel?
Under the federal Homeowners Protection Act (HPA), the lender must automatically terminate PMI when your balance reaches 78% of the original value of the home, provided your payments are current. You can request cancellation earlier — at 80% of original value — if you have a good payment history.
Three ways to remove PMI
Based on original value (purchase price or original appraisal, whichever is lower). Required by federal law if you're current on payments.
Written request when your balance reaches 80% of original value. Requires good payment history and no additional liens.
If prices in your area rose, you can request a new appraisal and show 20%+ equity based on current value. Lenders typically require 2 to 5 years to have passed.
Practical steps
- Ask your servicer for your current balance and original value.
- Calculate your current LTV — if you're near or below 80%, it's worth requesting.
- Write a formal letter requesting PMI cancellation.
- If an appraisal is required, the servicer will provide process instructions.
- Keep all documentation in writing.
Important note
These rules apply to conventional loans. FHA loans have their own insurance (MIP) with different rules — in many cases MIP lasts for the life of the loan and the only way to remove it is to refinance into a conventional loan.