CancelPMI

PMI education

What Is PMI and How Do You Cancel It?

Private mortgage insurance (PMI) protects your lender, not you. Many homeowners can remove PMI earlier than they realize: once your loan balance reaches 80% of your home's current value, you can often request cancellation instead of waiting for the lender's automatic 78% timeline.

How PMI Works

Private Mortgage Insurance is usually required on a conventional mortgage when the down payment is below 20%. It is meant to protect the lender if the borrower defaults, but the monthly cost lands on the homeowner.

Lender protection

PMI is designed to cover the lender if the borrower defaults. It does not insure the homeowner.

Monthly cost

The premium is usually built into the monthly mortgage payment, which makes it easy to ignore for too long.

Equity milestone

The more equity you build, the closer you get to being able to request removal on a conventional loan.

How Much Does PMI Cost?

PMI usually costs between 0.5% and 1.5% of the original loan amount each year. That can quietly add up to hundreds of dollars per month and thousands per year.

Typical annual PMI range

0.5%–1.5%

Of the original loan amount each year.

Example monthly PMI

$167–$500

On a $400,000 mortgage, depending on risk and down payment.

When Can You Cancel PMI?

There are two different timelines borrowers need to know. One is the lender's automatic rule. The other is the borrower-request rule that often happens earlier.

Borrower request

80% of current value

On a conventional loan, many borrowers can request PMI removal once the balance reaches 80% of the home's current value and the payment history is clean.

Automatic termination

78% of original price

Lenders must automatically terminate PMI under the Homeowners Protection Act once the balance reaches 78% of the original purchase price, not the current value.

FHA vs. Conventional Loans

Loan TypeInsurance TypeHow It Ends
ConventionalPMICan often be requested off at 80% of current value and automatically terminates at 78% of original price.
FHAMIPOften stays longer, and many modern FHA loans require refinancing to remove it.
VANo PMIVA loans do not use PMI, though they may include a funding fee.

The Homeowners Protection Act

The HPA is the federal law that requires disclosure and automatic termination rules for conventional PMI. It is why 78% of the original purchase price matters so much, even when it is not the most favorable number for the borrower.

What the law guarantees

  • Annual PMI disclosures on qualifying conventional loans.
  • Borrower-request cancellation rules when conditions are met.
  • Automatic termination when the balance reaches 78% of original value.

Why borrowers still overpay

  • Borrowers usually are not told when current appreciation creates an earlier path.
  • Statements focus on payment due, not whether PMI is still justified.
  • The automatic termination rule can lag far behind real market value.

Ready to Check If You Qualify?

Run the calculator, see your likely PMI threshold, and stop waiting on your lender's slower timeline.

Check Eligibility