Mortgages guide
When and How to Cancel Private Mortgage Insurance
For many conventional mortgages covered by the Homeowners Protection Act, a borrower can request PMI cancellation when the scheduled principal balance reaches 80% of the home’s original value, subject to conditions. Automatic termination generally applies at a different scheduled point. Loan type, payment history, property value, and contract details matter, so confirm your own eligibility with the servicer.
What PMI covers
Private mortgage insurance protects the lender against certain losses if the borrower defaults; it does not insure the homeowner against missed payments or a home-value decline. A lender may require PMI on a conventional mortgage with a smaller down payment. Mortgage insurance rules differ for FHA, VA, USDA, lender-paid arrangements, and other loan structures.
The 80% request point
For many covered mortgages, you may ask the servicer to cancel PMI when the principal balance is scheduled to reach 80% of the home’s original value, or sooner if extra payments bring the balance to that point. The original value generally follows the law’s definition and may be tied to the lower of the purchase price or appraisal at purchase; refinance cases use the applicable refinance value.
Conditions and automatic termination
A written request may need to be supported by a good payment history, current payments, no junior liens, and evidence that the property value has not declined below the relevant original value. For many covered loans, automatic termination is generally scheduled when the balance is first set to reach 78% of original value, if payments are current. The servicer’s disclosures and law-specific exceptions control.
A simple balance example
If a home’s relevant original value is $300,000, 80% is $240,000 and 78% is $234,000. Those figures are balance thresholds, not a promise that PMI ends on a particular date. The servicer may require a written request or documentation, and a loan’s amortization schedule can differ because of rate changes, missed payments, or extra principal.
What to ask the servicer
Ask for the PMI disclosure, the scheduled cancellation date, the current principal balance, the original value used, and any required appraisal, payment-history, or lien documentation. Confirm whether you have borrower-paid PMI or another kind of mortgage insurance. Keep copies of your request and follow up if the next statement still includes a premium.
Do not assume extra principal is enough
An extra payment may move the balance toward a cancellation threshold, but it does not automatically remove the premium. Check prepayment terms, payment application, and the servicer’s request procedure. FHA mortgage insurance can follow different rules; contact the servicer before making a decision based on a conventional PMI calculation. A $100 extra payment changes principal by $100 only if credited that way; it does not establish the appraisal, payment history, or lien conditions the servicer may require.
| Threshold | Balance |
|---|---|
| 80% request point | $240,000 |
| 78% scheduled point | $234,000 |
Frequently asked questions
Can I request PMI cancellation at 80% loan-to-value?
For many covered mortgages, you may request cancellation at 80% of the home’s original value if legal and loan conditions are met. Confirm details with your servicer.
Does FHA mortgage insurance follow the same rules?
No. FHA and other loan programs can have different insurance rules. Check your loan documents and servicer guidance.
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