How to Remove PMI from Your Mortgage

PMI on a conventional loan is removable — you do not have to pay it for the life of the loan. Under the Homeowners Protection Act, lenders must follow specific rules for canceling PMI once you reach certain equity thresholds.

The Two PMI Removal Paths

1. Request-Based Removal at 80% LTV

You can request PMI removal when your loan balance reaches 80% of the original property value. Requirements:

• •Good payment history (no 30-day late payments in the past 12 months)
• •The property value has not declined
• •You may need a new appraisal (typically $400-$600)
• •No other liens on the property

Submit a written request to your servicer. They have 30 days to respond.

2. Automatic Termination at 78% LTV

Even if you do not request it, the lender must automatically terminate PMI when your loan balance reaches 78% of the original value (based on the original amortization schedule). This happens automatically — no request needed.

Speeding Up PMI Removal

• •Extra principal payments — every dollar reduces your balance faster
• •Home improvements — increase value (requires new appraisal)
• •Market appreciation — if home values rise, request a new appraisal
• •Biweekly payments — adds one extra payment per year

What Does Not Work

• •Verbal requests — must be in writing
• •Refinancing to the same lender — a new loan starts a new PMI schedule
• •Paying down to 78% on a different schedule — automatic termination is based on the original amortization schedule

FHA MIP Is Different

FHA mortgage insurance (MIP) is not removable the same way. If you put less than 10% down on an FHA loan, MIP is permanent for the life of the loan. The only way to remove it is to refinance into a conventional loan.

Key Takeaways

• •Request PMI removal at 80% LTV (written request, good payment history)
• •Automatic termination at 78% LTV (based on original amortization)
• •Extra payments and appreciation help you reach 80% sooner
• •A new appraisal may be needed if relying on home value increases
• •FHA MIP is not removable — only refinancing to conventional removes it