How to Remove PMI Without Refinancing

PMI Doesn't Have to Be Permanent — Even Without Refinancing

Private mortgage insurance (PMI) is typically required when you buy a home with less than 20% down on a conventional loan. The cost runs 0.5%–1.5% of your loan amount per year — on a $300,000 loan, that's $1,500–$4,500 annually added to your mortgage payment. It protects the lender, not you, and it serves no purpose once you've built sufficient equity.

Most homeowners assume they need to refinance to eliminate PMI. But federal law (the Homeowners Protection Act of 1998, or HPA) gives you specific rights to cancel PMI on conventional loans without refinancing. Here are the three methods, in order of how quickly they can work.

Method 1: Request Cancellation at 80% LTV

Under the HPA, you have the right to request PMI cancellation when your principal balance drops to 80% of the original purchase price. This is based on the original value — not current market value — so appreciation doesn't affect this method.

Your mortgage servicer is required to cancel PMI no later than the first day of the month after the scheduled cancellation date, once you've submitted a valid written request and met all requirements. This can save months of premiums compared to waiting for automatic cancellation.

To find your current balance and original purchase price, check your annual escrow statement or call your servicer. If you've been making extra principal payments, you may already be below 80% without knowing it.

Method 2: Automatic Cancellation at 78% LTV

If you never request cancellation, federal law still protects you: your servicer is legally required to automatically cancel PMI when your balance reaches 78% of the original purchase price, based on your scheduled amortization.

For a 30-year loan with a 10% down payment (starting at 90% LTV), automatic cancellation typically occurs around year 11. The exact date depends on your interest rate — higher rates mean slower principal paydown and a later cancellation date. Our PMI removal calculator shows exactly when your scheduled cancellation date is.

Method 3: Request Cancellation Using Current Appraised Value

If your home has appreciated since you bought it, its current market value may be significantly higher than the original purchase price. In this case, you can request PMI cancellation based on a new appraisal showing your LTV is now 80% or below of current value.

This is the most powerful method when home prices have risen significantly. If you bought a home for $300,000 with 5% down and it's now worth $380,000, your LTV on the current value is only 73% — well below the 80% threshold. A $400–$500 appraisal fee can eliminate $200–$500/month in PMI permanently.

Use our LTV calculator to check whether your current estimated value gets you to 80% or below before ordering an appraisal.

FHA Loans: Different Rules Apply

FHA mortgage insurance premiums (MIP) are governed by different rules than conventional PMI, and they're generally harder to remove without refinancing:

• FHA loans originated after June 3, 2013 with less than 10% down: MIP is permanent — it does not cancel for the life of the loan. The only way to remove it is to refinance to a conventional loan once you have 20% equity.
• FHA loans with 10% or more down payment: MIP cancels after 11 years.
• FHA loans originated before June 2013: MIP cancels when the balance reaches 78% of the original purchase price (similar to conventional automatic cancellation).

If you're paying FHA MIP permanently and have built 20%+ equity, refinancing to a conventional loan specifically to eliminate MIP is often worth the closing costs. Use our refinance calculator to see if the break-even makes sense based on your current balance and rate.

Step-by-Step: How to Remove PMI on a Conventional Loan

1. Calculate your current LTV. Divide your current balance by the original purchase price to get your LTV. If it's at or below 80%, you're already eligible to request cancellation.
2. Gather your payment history. You need a clean payment record — no 30-day lates in the past year, no 60-day lates in the past two years.
3. Contact your servicer in writing. Send a written request to remove PMI. Include your loan number, property address, and a statement that you meet the cancellation requirements.
4. If using current value, order an appraisal. Your servicer will direct you to an approved appraiser. Pay the fee ($300–$600). If the appraised value supports 80% LTV, PMI is cancelled.
5. Confirm cancellation in writing. Your servicer must confirm cancellation and tell you the effective date. Check your next monthly statement to verify PMI has been removed.

Related Tools & Articles

• How Much Equity Do You Need to Refinance?
• Refinance Break-Even Explained
• FHA Streamline Refinance: When MIP Cancellation Requires a Switch
• How Soon Can You Refinance? Seasoning Requirements Explained
• Refinancing with Bad Credit — What's Possible
• Refinance Closing Costs by State

Frequently Asked Questions

When is PMI automatically removed?

Under the Homeowners Protection Act (HPA), PMI on conventional loans must be automatically cancelled when your loan balance reaches 78% of the original purchase price — based on the original amortization schedule, not market value. You don't need to request this; it happens automatically as long as you're current on payments.

Can I remove PMI earlier by requesting a lender review?

Yes. You can request PMI cancellation when your balance drops to 80% of the original purchase price, provided you have a good payment history and no junior liens. Some lenders also allow early cancellation if your home has appreciated and a new appraisal shows 80% LTV — usually allowed after 2 years of ownership, sometimes 5 years depending on the loan.

Does PMI go away on FHA loans?

Not automatically and not the same way. FHA loans originated after June 2013 with less than 10% down payment require mortgage insurance premiums (MIP) for the life of the loan — it never cancels. For FHA loans with 10%+ down payment, MIP cancels after 11 years. To remove FHA MIP before then, you typically must refinance to a conventional loan once you reach 20% equity.

How much does a home appraisal cost for PMI removal?

A standard home appraisal for PMI removal typically costs $300–$600, depending on your home size and location. Your lender may require a specific appraiser from their approved panel. If your home has appreciated significantly, the appraisal fee pays for itself within a month or two of PMI savings.

Sources & References

• Consumer Financial Protection Bureau (CFPB) — Explore Mortgage Rates
• Freddie Mac Primary Mortgage Market Survey (PMMS)
• Federal Housing Finance Agency (FHFA) — Conforming Loan Limits
• IRS Publication 936 — Home Mortgage Interest Deduction
• U.S. Department of Housing and Urban Development (HUD) — FHA Loan Programs
• CFPB — What Is Private Mortgage Insurance (PMI)?
• Homeowners Protection Act of 1998 (FDIC overview)

Editor's Note — July 2026: This article was reviewed for accuracy in July 2026. Formulas, program eligibility rules, and guidelines reflect current requirements. For the latest mortgage rates, see Freddie Mac's weekly PMMS survey. Borrowers who locked rates of 6.5%–8.0% in 2022–2023 may find the current environment (6.5%–7.0%) worth running numbers on — use the break-even calculator or the Decision Center.