Private mortgage insurance doesn't have to last the life of your loan — here are the three ways to drop it.
Written & fact-checked by the CoverFormula editorial team · Last reviewed 2026-07-29
PMI is tied to your loan-to-value (LTV) ratio, not your interest rate — so removing it doesn't require a new loan. Under the federal Homeowners Protection Act, there are two guaranteed removal paths built into every conventional mortgage, plus a third option many borrowers don't realize they have.
Your lender is legally required to automatically terminate PMI once your loan balance drops to 78% of the original home value, based on your amortization schedule — as long as you're current on payments. No paperwork, no request needed. Check your amortization schedule to see roughly when this happens.
You don't have to wait for the automatic date. Once your balance reaches 80% of the original value, you can proactively request cancellation from your servicer — this can shave months or years off compared to waiting for automatic termination, since normal amortization is slow in the early years of a loan.
If your home has appreciated, you may not need to wait for your original 80% threshold at all. Many lenders will remove PMI early if a new appraisal shows you've reached 80% loan-to-value based on current market value — not your original purchase price. This typically requires a minimum of 2 years of on-time payments (varies by lender), and you'll usually pay for the appraisal yourself, but it can be worth it if your area has seen meaningful price growth.
FHA loans use MIP (Mortgage Insurance Premium), not PMI — a different federal program with its own rules. On most FHA loans originated after 2013, MIP cannot be removed at all without refinancing into a conventional loan.
Your original purchase price, current loan balance, and current home value together determine which of these three paths applies to you right now. Our PMI Removal Calculator checks all three thresholds at once and shows your current annual PMI cost as motivation to act.