The three PMI dates that matter
Private mortgage insurance protects the lender, not you, when you borrow more than 80% of a home's value. The Homeowners Protection Act gives you three ways out on a conventional loan:
- 80%: you can ask. Once your balance reaches 80% of the original value (or is scheduled to), you can request cancellation in writing. Extra payments count.
- 78%: it ends automatically. On the date your balance is scheduled to hit 78% on the original schedule, the servicer must drop it, if you're current on payments.
- Midpoint: the latest it can run. If neither has happened by halfway through your loan term, PMI must end the month after the midpoint.
Why asking beats waiting: an example
Borrow $380,000 on a $400,000 home at 6.5% for 30 years, paying $160 a month for PMI. You can ask to cancel after 124 payments (10 yrs 4 mo), but automatic removal wouldn't come until payment 135. Asking on time saves $1,760. Add $300 a month toward principal and you can ask after 76 payments, saving $9,440 compared with waiting.
Calculated with the same engine as the calculator above.
How to ask your servicer
- Send a written request once you reach the 80% date. Many servicers have a form.
- Expect to show a good payment history: typically no payment 30 days late in the past year and none 60 days late in the past two.
- Your lender may require proof the home hasn't lost value, such as an appraisal, and may ask that there's no second mortgage.
- Keep paying PMI until the servicer confirms it has been cancelled.
Home gone up in value? The new-appraisal route
The dates above use your home's original value. If it's worth more now, many lenders will cancel PMI based on a new appraisal. That's lender policy rather than a legal right. For loans owned by Fannie Mae, the usual limits are a balance of 75% of the current value if the loan is two to five years old, or 80% after five years. You pay for the appraisal, so check the numbers first.
FHA loans work differently
FHA loans charge a mortgage insurance premium (MIP) instead of PMI, and the Homeowners Protection Act dates don't apply. For most FHA loans since June 2013, MIP lasts 11 years if you put down at least 10%, and for the life of the loan otherwise. The usual way out is refinancing into a conventional loan once you have 20% equity. See how to remove FHA mortgage insurance.
Step-by-step instructions and a request letter are in our guide on how to get rid of PMI.
Questions people ask
When can I ask to remove PMI?
Under the federal Homeowners Protection Act, you can ask your servicer in writing to cancel PMI once your principal balance reaches 80% of your home's original value, or is scheduled to. You generally need a good payment history, to be current, and your lender may ask you to show the home hasn't lost value.
When does PMI come off automatically?
Your servicer must end it on the date your balance is first scheduled to reach 78% of the original value on your original payment schedule, as long as you're current. If that hasn't happened by the midpoint of the loan term, it must end then.
Do extra payments count toward removing PMI?
Yes, for the 80% request: it's based on your actual balance, so extra principal payments get you there sooner. Automatic removal at 78% follows the original schedule, which is why it pays to ask rather than wait.
What does "original value" mean?
Usually the lower of the price you paid and the appraised value when you took out the loan. If your home has risen in value, some lenders will let you drop PMI based on a new appraisal, but that's a lender policy, not a right under the Act.
Does this apply to FHA loans?
No. These rules cover private mortgage insurance on conventional loans. FHA loans charge a mortgage insurance premium (MIP) with different rules, and for many FHA loans it lasts for the life of the loan.
For education and estimates only; not financial, tax or legal advice. Your lender's figures are final. See How we calculate.