# How to Remove PMI from Your Mortgage By Opendoor Editorial Team | 2026-06-15 # How to Remove PMI from Your Mortgage Private mortgage insurance (PMI) is a required cost on most conventional loans when you put less than 20 percent down — but it is not permanent. If you are wondering how to get rid of PMI, the answer is more straightforward than most lenders make it seem. Federal law guarantees that PMI will end automatically once your loan balance reaches [78 percent of the home's original value](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/), and you can request cancellation even earlier at 80 percent. A verified home-value increase or a refinance can speed the timeline further. This guide walks through every legal pathway to remove PMI, the documentation lenders require, and when refinancing makes financial sense. If you need a refresher on [what PMI is and how it works](https://www.opendoor.com/articles/what-is-mortgage-insurance-pmi), start there first. ## Key Takeaways - The [Homeowners Protection Act of 1998](https://www.govinfo.gov/app/details/PLAW-105publ216) requires lenders to automatically cancel PMI when your loan balance reaches 78 percent of the home's original value. - You can request PMI cancellation in writing once you reach 80 percent loan-to-value, provided you are current on payments and have no subordinate lien. - A new appraisal — typically $300–$600 — can document a home-value increase that pushes you under 80 percent LTV earlier than your amortization schedule would. - FHA loans follow different rules: most FHA MIP stays for the life of the loan unless you refinance into a conventional mortgage. - Refinancing is often the fastest way to eliminate PMI if current rates and your equity position make the new loan cheaper overall. ## The Four Ways to Remove PMI Before diving into the details, here is a decision table showing which removal method applies to your situation. | Method | Loan Type | LTV Trigger | Who Initiates | Typical Timeline | | --- | --- | --- | --- | --- | | Automatic termination | Conventional | 78% of original value | Lender (required by law) | Per amortization schedule | | Borrower-requested cancellation | Conventional | 80% of original value | You (written request) | 30–45 days after request | | Appraisal-based early cancellation | Conventional | 75%–80% of current value | You (request + appraisal) | 60–90 days | | Refinance into a new loan | Conventional or FHA | Below 80% on new loan | You (new application) | 30–60 days | Each path has specific requirements. Let us walk through them. ## When Does PMI Automatically End? The 78 Percent Rule Under the [Homeowners Protection Act of 1998](https://www.govinfo.gov/app/details/PLAW-105publ216), your loan servicer **must** automatically terminate PMI on the date your loan balance is scheduled to reach 78 percent of the home's original value. This is based on your original amortization schedule — not your actual payment history. That distinction matters: even if you make extra payments and reach 78 percent LTV faster, your servicer may not automatically cancel PMI until the originally scheduled date unless you submit a written request. Two conditions must still be met for automatic termination. You must be [current on your mortgage payments](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) at the time the scheduled date arrives. If you are not, automatic termination is delayed until the first day of the month after you become current. **What this means in practice:** On a 30-year conventional loan for $300,000 with a 5 percent down payment, you start at 95 percent LTV. Based on a standard amortization schedule at a 7 percent rate, you would not reach 78 percent LTV until roughly year 9 or 10. That is a long time to wait — which is why the borrower-requested path at 80 percent is worth pursuing. To [see how PMI affects a $300k payment](https://www.opendoor.com/articles/mortgage-payment-on-300k-house), check our mortgage breakdown. ## Final PMI Termination at the Midpoint of the Loan Even if you have not reached 78 percent LTV, federal law provides a backstop. Your servicer must terminate PMI at the [midpoint of your loan's amortization schedule](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) — that is year 15 of a 30-year mortgage or year 7.5 of a 15-year mortgage. Again, you must be current on payments at that time. This provision primarily protects borrowers with interest-only periods or other non-standard amortization features that slow principal paydown. ## How to Request PMI Cancellation at 80 Percent LTV You do not have to wait for automatic termination. The [Homeowners Protection Act allows you to request cancellation](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) once your loan balance reaches 80 percent of the home's **original value**. Your servicer must honor this request if: - You submit the request in writing. - You are current on your mortgage payments. - You have a good payment history — typically no payments 30 or more days late in the past 12 months and no payments 60 or more days late in the past 24 months. - There is no subordinate lien (such as a home equity line of credit) on the property. - Your servicer may require evidence the property value has not declined below the original value (an appraisal or broker price opinion at your expense). The key difference from automatic termination: **you** initiate this, and it is based on actual principal paid — not the scheduled amortization. If you have been making extra principal payments, you can reach 80 percent LTV years ahead of schedule. ## Cancel PMI Early Through a Home Value Increase Here is where many homeowners leave money on the table. If your home has appreciated significantly since purchase, you may already have enough equity to cancel PMI — even if your scheduled payments have not yet brought you to 80 percent LTV. The process works like this: you request that your servicer order an appraisal to [verify your current home value](https://www.opendoor.com/articles/home-value-estimator-accuracy). If the appraisal shows your current loan-to-value ratio has dropped below the required threshold, your servicer cancels PMI. The LTV thresholds for appraisal-based cancellation vary based on how long you have had the loan. According to Fannie Mae servicing guidelines: | Loan Age | Required LTV (Current Value) | Notes | | --- | --- | --- | | Less than 2 years | 75% or lower | Stricter threshold for newer loans | | 2–5 years | 80% or lower | Standard threshold | | More than 5 years | 80% or lower | Standard threshold | [Freddie Mac follows similar servicing rules](https://guide.freddiemac.com/app/guide/section/8203.6), though always confirm with your specific loan servicer. The appraisal must be ordered through your lender — you generally cannot use an independent appraisal you commission yourself. **Is the appraisal worth the cost?** If you are paying [$75 to $200 per month in PMI](https://www.consumerfinance.gov/ask-cfpb/what-is-private-mortgage-insurance-en-122/) and a $400–$600 appraisal could eliminate that cost, the math works in your favor within a few months. ## How to Write a PMI Cancellation Request Letter Your servicer needs a formal written request. Here is what to include: - Your full name and the co-borrower's name (if applicable) - Your loan number and the property address - A clear statement: "I am requesting cancellation of private mortgage insurance under the Homeowners Protection Act of 1998" - Your current loan balance and the original appraised value, with your calculated LTV - A request for information on any additional requirements (appraisal, payment history verification) - Your signature and the date Send the letter to your loan servicer's address — this may differ from where you mail your monthly payment. Check your mortgage statement or your servicer's website for the correct correspondence address. Keep a copy for your records and consider sending via certified mail for proof of delivery. Most servicers respond within 30 to 45 days. If your servicer does not respond or wrongly denies your request, you can file a complaint with the [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/complaint/). ## What Documentation Your Lender Will Require When you submit a PMI cancellation request, expect your servicer to verify the following: - **Current loan balance.** Your servicer will confirm your principal balance has reached the required LTV threshold. - **Payment history.** They will review your payment record for the past 12 to 24 months per Fannie Mae and [Freddie Mac](https://guide.freddiemac.com/app/guide/section/8203.6) servicing requirements. - **Property value.** If you are relying on home appreciation (not just scheduled payments), the servicer will order an appraisal or broker price opinion. You pay for this — typically $300 to $600. - **No subordinate liens.** You may need to certify that no second mortgage or HELOC exists on the property. ## Removing PMI by Refinancing If your home value has increased substantially or if [current mortgage rates](https://www.consumerfinance.gov/owning-a-home/explore-rates/) have dropped since you locked in your original loan, refinancing into a new conventional mortgage with no PMI may be the most efficient path. This is especially true for FHA borrowers who cannot otherwise cancel their mortgage insurance. Refinancing to remove PMI makes financial sense when: - Your new loan amount will be at or below 80 percent of your home's current appraised value. - The new interest rate is comparable to or lower than your existing rate. - The closing costs of the refinance are recouped quickly by the PMI savings. **Example:** Suppose you are paying $150 per month in PMI and a refinance would cost $4,000 in closing costs but eliminate PMI entirely and keep a similar interest rate. Your breakeven point is roughly 27 months ($4,000 ÷ $150/month). If you plan to stay in the home longer than that, refinancing pays off. To understand [what affects mortgage rates](https://www.opendoor.com/articles/how-mortgage-rates-work) and when refinancing is favorable, review current conditions carefully. ## FHA MIP vs. Conventional PMI Removal — Critical Difference This is where many homeowners get tripped up. FHA mortgage insurance premium (MIP) and conventional PMI follow completely different cancellation rules. For FHA loans originated on or after June 3, 2013: - **Less than 10 percent down:** MIP stays for the **life of the loan**. It cannot be cancelled regardless of your LTV. - **10 percent or more down:** MIP can be removed after 11 years. The only way to eliminate lifetime FHA MIP is to refinance into a conventional loan — which requires at least 20 percent equity (or accepting conventional PMI until you reach that threshold). This is a critical distinction when comparing [loan types](https://www.opendoor.com/articles/types-of-mortgage-loans) and considering your long-term costs. Understanding [how much mortgage you can afford](https://www.opendoor.com/articles/how-much-mortgage-can-i-afford) should factor in whether FHA MIP will be a permanent expense. | Loan Type | Insurance Name | Cancellable? | How to Remove | | --- | --- | --- | --- | | Conventional (less than 20% down) | PMI | Yes | Auto at 78% LTV, request at 80%, appraisal, or refi | | FHA (less than 10% down, post-6/3/2013) | MIP | No (life of loan) | Refinance to conventional only | | FHA (10%+ down, post-6/3/2013) | MIP | After 11 years | Automatic after 11 years, or refi sooner | | VA | Funding fee (one-time) | N/A | No ongoing insurance to cancel | | USDA | Guarantee fee (upfront + annual) | No | Refinance to conventional only | ## VA and USDA Loans — How Funding Fees Differ VA and USDA loans do not carry traditional PMI, which is one reason they are popular among eligible borrowers. However, they are not insurance-free. - **VA loans** charge a [one-time funding fee at closing](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) that can be financed into the loan. There is no monthly mortgage insurance premium, so there is nothing to cancel later. - **USDA loans** charge both an upfront guarantee fee and an annual fee that functions like mortgage insurance. Like FHA MIP, the annual fee cannot be cancelled — refinancing to a conventional loan is the removal path. Note that PMI, MIP, and funding fees are distinct from [hazard insurance](https://www.opendoor.com/articles/what-is-hazard-insurance-on-mortgage), which is a separate lender requirement that protects against property damage. ## Common Reasons PMI Removal Requests Are Denied If your servicer denies your cancellation request, it is usually for one of these reasons: - **Late payments.** Even one payment 30 or more days late in the past year can disqualify you. - **A second lien exists.** A home equity loan or HELOC counts as a subordinate lien and must typically be paid off or subordinated. - **Property value has declined.** If an appraisal shows the home is worth less than expected, your LTV may still be above the threshold. - **Loan seasoning requirements.** Some servicers require a minimum of 24 months of on-time payments before accepting an appraisal-based cancellation request, per Fannie Mae servicing rules. If you believe your servicer has incorrectly denied your request, review the denial letter carefully. You have the right to appeal, and you can escalate the issue to the [CFPB](https://www.consumerfinance.gov/complaint/). ## Should You Pay Extra to Speed Up PMI Removal? Making extra principal payments can help you reach the 80 percent LTV threshold faster, allowing you to submit a borrower-requested cancellation sooner than the amortization schedule allows. **Worked example:** You have a $285,000 loan balance on a home originally valued at $350,000. Your current LTV is 81.4 percent. The 80 percent threshold is $280,000. You need to pay down $5,000 in additional principal. If your PMI is [$125 per month](https://www.consumerfinance.gov/ask-cfpb/what-is-private-mortgage-insurance-en-122/), eliminating it saves you $1,500 per year. Paying an extra $5,000 now recoups its value in about 40 months through PMI savings alone — and the principal payment also reduces your total interest over the life of the loan. Before redirecting extra cash toward principal, weigh this against other financial priorities such as building an emergency fund or paying down higher-interest debt. **Frequently asked questions** ## Disclosure Opendoor Home Loans LLC is not available in all markets. Products, programs, rates, and terms are subject to change without notice. This material is provided for informational purposes only and is not an offer or guarantee of credit. Contact Opendoor Home Loans for current availability. --- *Originally published at [https://www.opendoor.com/articles/how-to-remove-pmi](https://www.opendoor.com/articles/how-to-remove-pmi)*