At what point does PMI automatically cancel?

Under the Homeowners Protection Act, your lender must automatically cancel PMI when your loan balance reaches 78% of the original purchase price based on the amortization schedule — no action required from you. You can request cancellation earlier at 80% LTV.

Can I remove PMI early if my home has increased in value?

Yes, if your servicer allows cancellation based on current value. Most lenders require the loan to be at least 2 years old and your LTV to be below 80% (some require 75%). You'll typically need to pay for a new appraisal ($400–$600) to document the current value.

How much does PMI cost per month?

PMI typically costs 0.5% to 1.5% of your loan amount per year. On a $350,000 loan, that's $145 to $438 per month. The exact rate depends on your credit score, loan type, and down payment amount.

Can I remove PMI from an FHA loan?

Not the same way. FHA loans have mortgage insurance premiums (MIP), not PMI. For FHA loans originated after June 3, 2013 with less than 10% down, MIP lasts the entire life of the loan. The only way to remove it is to refinance into a conventional loan once you have 20% equity.

Does making extra principal payments help remove PMI faster?

Yes. Every extra dollar toward principal reduces your balance and moves up the date you hit 80% LTV. If you're close to the threshold, a lump-sum extra payment can accelerate cancellation by months or years — and the monthly savings from losing PMI can make the math favorable.

How to Remove PMI and Lower Your Monthly Payment

Private mortgage insurance exists for one reason: you put down less than 20%, so the lender is carrying more risk. PMI protects them — not you — if you default. And you pay for it. The average PMI premium runs 0.5% to 1.5% of the loan amount per year, which on a $350,000 loan means $145 to $440 per month in extra cost.

The good news: it's not permanent. You have more control over when it ends than most people realize.

How PMI Removal Works by Default

The Homeowners Protection Act (HPA) sets the baseline rules for conventional loans:

Automatic cancellation at 78% LTV: When your loan balance drops to 78% of the original purchase price — based on your amortization schedule — your lender is required to cancel PMI automatically.
Termination request at 80% LTV: When you reach 80% LTV based on original value and schedule, you can request cancellation in writing.

The catch: amortization is slow in the early years. On a 30-year mortgage, reaching 80% LTV on schedule typically takes 8 to 11 years depending on your rate and down payment.

The Faster Route: Get a New Appraisal

If your home has appreciated significantly, you may already be at 80% LTV — or better — based on current market value. Here's how to use that:

Check your current LTV: Divide your current loan balance by the original purchase price. If the result is 0.80 or lower, you may be eligible to request cancellation based on original value.
Check if your home has appreciated: Look at recent comparable sales in your area. If your home's current value puts your LTV below 80% (or 75% for some lenders), you may qualify for cancellation based on current value.
Contact your servicer: Call or write to your mortgage servicer and ask specifically about their PMI cancellation policy, minimum loan age, and whether they accept an appraisal or require an AVM.
Order a home appraisal: If the servicer accepts an appraisal, hire a licensed appraiser (typically $400–$600). Do this only after confirming the servicer's requirements — you don't want to spend on an appraisal and then find out you don't yet meet the loan age requirement.
Submit a written cancellation request: Once you have the appraisal (if required) and meet all conditions, submit a formal written request to cancel PMI. The servicer is required to respond and cancel if you meet the criteria under the Homeowners Protection Act.

Example: You bought at $400,000 and put 10% down. Your original loan was $360,000. The home now appraises at $480,000. Your current balance of $340,000 ÷ $480,000 = 70.8% LTV. You're well past the threshold — the appraisal gets PMI removed years ahead of schedule.

Make Extra Principal Payments

Every extra dollar you put toward principal reduces your balance and moves up the date you hit 80% LTV. If you're $15,000 away from hitting 80% LTV on the original purchase price, an extra $1,250/month in principal payments gets you there in a year — and eliminates a $200/month PMI payment. That's a strong return on the extra payment.

Refinancing to Remove PMI

If rates have dropped or your home has appreciated enough, refinancing can simultaneously remove PMI and lower your rate. The new loan would be originated at a lower LTV, so PMI may not apply. Do the break-even math first: if closing costs are $8,000 and monthly savings are $350, break-even is about 23 months.

FHA Loans: Different Rules, Less Flexibility

FHA loans have their own mortgage insurance premium (MIP), which doesn't follow the same cancellation rules. For FHA loans originated after June 3, 2013 with a down payment below 10%, MIP lasts for the life of the loan. The only way to remove it is to refinance into a conventional loan once you have enough equity.

What to Say When You Call Your Servicer

Start with: "I'd like to request PMI cancellation based on current market value. Can you walk me through your process and requirements?" Ask specifically about their minimum loan age, LTV requirement, and whether they accept an appraisal or AVM. Get the requirements in writing before you order an appraisal.