How to Remove PMI From Your Mortgage (Step by Step)

By Plain Money Guide · Researched from official sources · Checked 2026-07-19 · Editorial standards

📚 This article is part of our Rent, Deposits & Mortgage Costs series. See the full overview: Rent, Deposits & Mortgage Costs: Complete Guide.

How to Remove PMI From Your Mortgage (Step by Step)

Private mortgage insurance (PMI) is the extra monthly charge lenders add when you put down less than 20% on a conventional home loan. It protects the lender, not you. Once you have enough equity, you are legally entitled to have it removed on most loans — but almost no servicer will call to tell you that. The charge just keeps coming out of your escrow payment until you do something about it.

Here is exactly how to check whether you qualify today, how to ask, and what to do if the servicer stalls.

Table of Contents

First, know which rules apply to your loan

Most PMI removal rights come from the federal Homeowners Protection Act (HPA). It covers conventional loans on a single-family principal residence that closed on or after July 29, 1999. If your loan fits that description, the servicer has obligations it cannot opt out of.

Two different things can end PMI under the HPA:

  • Borrower-requested cancellation — you ask, in writing, once your loan balance drops to 80% of the home's original value.
  • Automatic termination — the servicer must drop it on its own once the balance reaches 78% of original value, based on the original payment schedule.

"Original value" usually means the lower of the purchase price or the appraised value at closing — not what the house is worth now. That distinction matters a lot, and it is the single most common point of confusion. The Consumer Financial Protection Bureau's PMI page lays out the statutory conditions in plain language.

Check whether you already qualify

Before You Call, Confirm: Conventional loan, not FHA, Balance near 80% of original value, Payments current, clean histor

Pull your most recent mortgage statement and find the current principal balance. Then divide it by the original value of the home. If the result is 0.80 or lower, you are in request territory. If it is 0.78 or lower and PMI is still showing up, the servicer may already be out of compliance.

Beyond the math, the HPA lets the servicer require a few reasonable things before it cancels:

  • You are current on payments, with a good recent payment history.
  • There is no subordinate lien (a HELOC or second mortgage) on the property.
  • You can show, if asked, that the property value has not declined below the original value. Some servicers require a broker price opinion or appraisal here, at your expense.

That last one trips people up. If your home lost value, the servicer can decline until values recover — even though you paid the balance down honestly.

The two paths compared

Two Ways PMI Ends: You Request It vs Automatic Termination

There is also a third backstop most homeowners never hear about: final termination. If PMI has not ended by either route, the servicer must drop it at the midpoint of your loan's amortization period — the halfway mark of the scheduled payment term — as long as you are current. On a 30-year loan, that is the start of year 16.

How to request cancellation, step by step

Requesting PMI Removal: Write your servicer, keep a copy, Ask what proof they require, Pay for appraisal only if needed,
  1. Send a written request. Phone calls create no paper trail. Use the servicer's designated address for written correspondence — it is printed on your monthly statement and is often different from the payment address. Include your loan number, the property address, your current balance, the original value, and a clear sentence asking to cancel PMI under the Homeowners Protection Act.
  2. Ask what evidence they need. Most servicers will tell you whether a current value opinion is required and which appraisal vendors they accept. Do not order an appraisal on your own before asking — one they will not accept is money burned.
  3. Get the value documented if required. The servicer, not you, orders the valuation and chooses the vendor; you pay for it. Two forms show up, and which one you get decides the cost: a broker price opinion (a licensed agent's estimate, the cheaper option) or a full interior appraisal (more expensive, but harder for the servicer to argue with). Get the quoted price in writing, then run the break-even before you authorize it: if the PMI line on your statement is $125 a month and the valuation is quoted at $500, you are even after four months and every month after that is money you keep.
  4. Watch the next two statements. Confirm the PMI line is gone and that your monthly payment dropped. If you escrow, the servicer should also run a new escrow analysis.

Cancelling early because your home gained value

The HPA is tied to original value, but that is a floor, not a ceiling. Loans owned by Fannie Mae or Freddie Mac have separate investor guidelines that allow cancellation based on the home's current appraised value. The axis that decides your threshold is loan seasoning — how long you have held the loan. As of August 2026, the Fannie Mae Servicing Guide (section B-8.1-04) sets it out this way, and Freddie Mac's guideline follows the same structure:

  • Seasoned less than 2 years — current-value cancellation is not available, with one exception: value added by substantial improvements you made and can document.
  • Seasoned 2 to 5 years — the balance must be 75% or less of the current appraised value.
  • Seasoned more than 5 years — the balance must be 80% or less of the current appraised value.

Documented substantial improvements are the lever that moves the line: they are what lets a loan short of the five-year mark work against the 80% threshold instead of 75%. In every case you must be current on payments, and the servicer orders the valuation. Check whether Fannie or Freddie owns your loan using the Fannie Mae loan lookup or the Freddie Mac loan lookup, then ask your servicer to confirm in writing which threshold it is applying to your loan number.

This route is worth the appraisal fee in markets where prices have risen sharply since you bought. Run the math first: divide the PMI amount on your statement by the appraisal quote to see how many months it takes to break even.

If your servicer says no or goes quiet

A refusal is not the last word Servicers must follow federal cancellation rules

Ask for the denial reason in writing, citing the specific condition you failed. Vague answers like "you don't qualify yet" are not useful and are hard to act on.

If you believe you met every condition, escalate:

  • Send a formal written complaint to the servicer's designated address for notices of error. Under Regulation X (12 CFR 1024.35), the servicer must acknowledge it within 5 business days and either correct the error or explain its findings within 30 business days, with a single 15-business-day extension allowed only if it notifies you.
  • File a complaint with the CFPB. Companies generally respond to CFPB complaints, and the exchange is documented.
  • Contact your state consumer protection office or state banking regulator.

If PMI was collected past the point it should have terminated, ask specifically for a refund of the overpaid premiums, not just prospective removal.

FHA loans work differently

If you have an FHA loan, you are not paying PMI — you are paying MIP (mortgage insurance premium), and the Homeowners Protection Act does not apply. What decides how long you pay is the date your FHA case number was assigned and your down payment. As of August 2026, HUD's rule from Mortgagee Letter 2013-04 still governs: for case numbers assigned on or after June 3, 2013, annual MIP lasts 11 years if you put down 10% or more, and for the entire life of the loan if you put down less than 10%. For case numbers assigned before that date, the older rule applies — MIP ends once the loan reaches 78% of original value, after a minimum of five years of payments on a 30-year term. There is no request-based cancellation on a life-of-loan MIP.

The practical exit for many FHA borrowers is refinancing into a conventional loan once they have enough equity — but that means a new rate, new closing costs, and a fresh term. Only worth it if the rate math works, not just to escape MIP. Current FHA insurance rules are published by HUD's Office of Single Family Housing.

Small moves that get you to 80% faster

  • Make extra principal payments and label them clearly as principal-only, or the servicer may apply them to the next month's payment instead.
  • Apply windfalls to principal — a tax refund or bonus reduces the balance immediately, unlike a scheduled payment mostly eaten by interest early in the loan.
  • Document improvements like a finished basement or a new roof. Under current-value cancellation rules, verified improvements can matter.

Every month PMI stays on the loan is money that builds no equity and buys you no coverage. Checking your ratio takes about five minutes.

FAQ

Does PMI automatically stop when my home's value goes up?

No. Automatic termination under federal law is based on your loan balance versus the home's original value, following the original payment schedule. Rising market value only helps if you affirmatively request cancellation under your loan investor's current-value guidelines, usually with an appraisal.

Can I get back PMI I paid after I should have qualified?

If premiums were collected past the point of required automatic termination, you can request a refund of the excess. Put the request in writing with the dates and amounts, and escalate to the CFPB if the servicer does not respond.

Will a HELOC block my PMI cancellation?

It can. Servicers are permitted to require that no subordinate lien exists on the property. If you have a home equity line you no longer use, closing it before you request cancellation removes that objection.

Which route is actually yours

If your balance is already at or below 78% of original value and PMI is still on the statement, do not order any valuation. Automatic termination was the servicer's job at that point, so the written request should demand removal plus a refund of the overpaid premiums, filed as a notice of error — that starts the 5-business-day acknowledgment and 30-business-day answer clock under Regulation X.

If you sit between 80% and 78% of original value, send the written request and stop there. That path costs nothing unless the servicer demands proof of value; the current-value route always costs a valuation fee.

If you are above 80% of original value but the market has moved, current-value cancellation is the only door open, and seasoning decides whether it works. Under two years it is shut unless you can document substantial improvements. At two to five years the balance must hit 75% of the appraised value — a harder bar than the 80% that applies after five years. The downside is concrete: pay $500 for a valuation that lands at 76% in year three and the money is gone with PMI still attached. Get the threshold your servicer will apply confirmed in writing first.

FHA with less than 10% down: MIP runs the life of the loan, so refinancing is the only exit — take it only if the new rate stands on its own. At 10% or more down, MIP ends at 11 years, and closing costs to escape it rarely beat waiting.

This article is general information, not financial, legal, or medical advice. Rules and amounts change — verify with official sources or a licensed professional before acting.

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