When can I remove PMI from my mortgage?

When can you remove PMI? On most conventional loans, you can ask your servicer to cancel private mortgage insurance once your loan balance reaches 80% of your home’s original value. If you do nothing, it must end on its own when your balance is scheduled to hit 78%. Rising home prices and extra payments can both get you there sooner.

These rules come from a federal law, the Homeowners Protection Act, plus the rules of Fannie Mae and Freddie Mac. They apply to loans on a single-family primary home that closed on or after July 29, 1999. FHA and VA loans work differently, and we cover those below. Here is how to find your date, speed it up and make the request.

What is PMI, and why do you pay it?

PMI is insurance that protects your lender, not you, if you stop paying your mortgage. Lenders usually require it on a conventional loan when you put down less than 20%. It lets you buy sooner with a smaller down payment, but it adds to your monthly cost until you can remove it.

The Consumer Financial Protection Bureau (CFPB) says, “PMI protects the lender—not you—if you stop making payments” (CFPB). Paying it does not stop a foreclosure if you fall behind. Most people pay it as a monthly charge added to the mortgage payment, though some pay a one-time premium at closing or a mix of both.

If you are still deciding how much to put down, our guide on how much down payment you need shows how PMI fits into that choice.

When can you ask to cancel PMI?

You can ask in writing to cancel PMI on the date your balance is scheduled to reach 80% of your home’s original value, or earlier if extra payments get you there first. You must be current, have a good payment history, have no second lien and show that your home’s value has not fallen.

The CFPB explains that your servicer “is legally required to grant your request to cancel your PMI” if you meet these conditions (CFPB):

1. You submit the request in writing.
2. You have a good payment history and are current on payments.
3. You certify there are no junior liens, such as a second mortgage, on the home.
4. You show the home’s value has not dropped below its original value, often with an appraisal, if the servicer asks.

What counts as a “good payment history”? For Fannie Mae loans, it means no payment 30 or more days late in the last 12 months and no payment 60 or more days late in the last 24 months (Fannie Mae Servicing Guide).

When does PMI end automatically?

PMI must end automatically on the date your balance is first scheduled to reach 78% of your home’s original value, as long as you are current. If you are behind, it ends once you catch up. Separately, PMI must stop the month after your loan’s midpoint, such as after 15 years on a 30-year loan.

The 78% date is based on your original payment schedule, not on extra payments you make. That is why asking at 80% is usually faster: you do not have to wait for the schedule to catch up.

The midpoint rule is a backstop. The CFPB notes it mostly matters for loans like interest-only loans, balloon loans or loans that went through forbearance, where the balance falls more slowly (CFPB). Fannie Mae adds that servicers cannot charge a fee for automatic termination.

Here is how the main conventional PMI paths compare.

Can rising home prices help you drop PMI sooner?

Yes, often. Fannie Mae lets owners of a one-unit primary home or second home ask to cancel PMI based on current value. Your balance must be 75% or less of today’s value if you have owned the home two to five years, or 80% or less after five years, confirmed by a new valuation.

These “current value” rules come from the loan investor, not the federal law. Fannie Mae’s Servicing Guide sets them out (Fannie Mae B-8.1-04):

• Two to five years after closing: LTV of 75% or less, based on current value.
• More than five years: LTV of 80% or less, based on current value.
• Major improvements: If you added real value with a substantial renovation, such as a kitchen remodel or added square footage, the two-year wait can be waived, but LTV must be 80% or less. Routine repairs do not count.
• Investment property or two- to four-unit home: LTV of 70% or less, after more than two years.

The same payment-history rules apply. Your servicer will order or require an interior and exterior valuation, and you may have to pay for it. If it turns you down, Fannie Mae requires the servicer to explain why and share the valuation result within 30 days.

Freddie Mac and other investors set their own current-value rules. The CFPB notes that investor guidelines cannot be less favorable to you than the federal law (CFPB). Ask your servicer who owns your loan and which rules apply.

Can you remove FHA or VA mortgage insurance?

FHA mortgage insurance follows HUD’s rules, not the PMI law. Under HUD’s current rates, FHA loans with 10% or more down pay annual premiums for 11 years, while most with less than 10% down pay them for the life of the loan. VA loans have no monthly mortgage insurance at all.

HUD’s Mortgagee Letter 2023-05 set the annual mortgage insurance premium (MIP) for 30-year FHA loans of $726,200 or less at 0.50% to 0.55% per year, effective March 20, 2023. Its duration table shows “11 years” when the loan-to-value is 90% or less and “Mortgage term” when it is higher (HUD Mortgagee Letter 2023-05). In plain words, most FHA buyers with 3.5% down keep MIP until they sell or refinance.

That is why many FHA owners refinance into a conventional loan once they have enough equity. If your new loan is 80% or less of your home’s value, you would usually need no PMI at all. Weigh the closing costs of a refinance against the MIP you would save; our guide on when to refinance your mortgage walks through that math.

VA loans do not require PMI or monthly MIP, according to the Department of Veterans Affairs. Most VA borrowers pay a one-time funding fee instead. For a broader look at how FHA and conventional insurance compare, see FHA vs conventional loans.

What happens after PMI is canceled?

Once PMI ends, your servicer stops charging it and your monthly payment drops. The servicer must refund any unearned premiums within 45 days. Check your next statement to make sure the charge is gone, and watch your escrow account, since your payment may be recalculated.

Fannie Mae’s Servicing Guide requires servicers to stop collecting the premium within 30 days of eligibility, lower your payment, notify you within 30 days and send any refund of unearned premium within 45 days (Fannie Mae B-8.1-04). With standard monthly PMI, there may be little or nothing left to refund.

A few things can block or delay cancellation:

• Lender-paid mortgage insurance. If your lender paid for the insurance in exchange for a higher rate, the CFPB says different rules apply. Refinancing is usually the only way out.
• A second mortgage or HELOC. A junior lien can stop a borrower-requested cancellation.
• Late payments. A recent 30-day or 60-day late can push your eligibility back a year or two.
• A drop in value. If your home is worth less than its original value, you may not qualify at 80% until you pay the balance down further.

What to do next

Knowing your numbers is the fastest way to stop paying PMI. A short call with your servicer and a few minutes with your loan statement will tell you which path is closest. Use these steps to build your own plan this week.

1. Ask your servicer for the dates your loan is scheduled to reach 80% and 78% of original value, and who owns your loan.
2. Compare your current balance with recent sales of similar homes to see if a current-value request could work.
3. If you can afford it, add extra principal to your payment and track when you will reach 80%.
4. Keep every payment on time, and avoid opening a second mortgage or HELOC until PMI is gone.
5. Submit your cancellation request in writing as soon as you qualify, then check your next statement and escrow analysis. For current rate averages if you are weighing a refinance, see Freddie Mac’s weekly Primary Mortgage Market Survey.