How to Remove PMI: Equity Rules, Requests, and Automatic Termination

What PMI does

Private mortgage insurance protects the lender, not the borrower, when many conventional loans start above 80% loan-to-value. It can make a smaller down payment possible, but it raises the monthly housing cost until cancellation or termination requirements are met.

The 80% request and 78% automatic thresholds

For many covered conventional mortgages, a borrower may request cancellation when the scheduled balance reaches 80% of the property's original value, subject to conditions such as a good payment history and evidence that the property has not declined in value. Automatic termination commonly occurs when the scheduled balance reaches 78% of original value and the loan is current. The midpoint rule can also apply in some cases.

Extra payments may reach 80% sooner, but servicers can require a written request and specific documentation. Appreciation-based cancellation may follow different investor, seasoning, and appraisal rules. FHA mortgage insurance follows different rules and is not interchangeable with conventional PMI.

A practical cancellation checklist

• Find the original property value and current principal balance.
• Read the PMI section of your closing documents and servicer notices.
• Ask the servicer for its written cancellation requirements and accepted valuation method.
• Keep payments current and retain confirmation after PMI is removed.

Model the estimated payment with and without PMI in our PITI mortgage calculator. The calculator's PMI amount is an initial planning estimate, not a servicer decision or cancellation date.