The two dates that matter
The Homeowners Protection Act (12 U.S.C. 4901–4902) gives every borrower on a conventional loan on their own home two ways out of PMI, and they land on different dates:
- Automatic termination at 78%. Your servicer must drop PMI when the balance is first scheduled to reach 78% of the original value, as long as you're current on payments. Scheduled is the key word: this date comes from the schedule the loan started with, so paying extra doesn't move it.
- Cancellation on request at 80%. You can ask, in writing, once you owe 80%. Here what you actually owe counts, so every extra payment brings the date closer. The lender can require that you're current, that you have a good payment history, and that the home hasn't lost value.
There's also a final termination at the midpoint of the loan's term (for a 30-year loan, after 15 years), which matters only if the schedule somehow hasn't reached 78% by then.
An example
$400,000 house, 5% down, so $380,000 borrowed at 6.5% over 30 years, with PMI at 0.5% of the loan a year: $158.33 a month.
- Paying as scheduled, PMI ends automatically after 11 years 3 months: $21,375 paid in all.
- Asking at 80% instead cancels it after 10 years 4 months: 11 months sooner and $1,742 less.
- Paying $200 extra a month brings the request date down to 7 years 3 months, saving $7,600 of PMI. The automatic date doesn't budge: it's still 11 years 3 months, which is exactly why asking is worth the letter.
How to get it cancelled
- Check where you are. Use the calculator above, or the balance calculator if you're partway through a loan, to see when you reach 80%.
- Write to your servicer. The request has to be in writing. Ask what they need: most want the loan current, no payment 30 days late in the past year or 60 days late in the past two.
- Expect an appraisal if you're leaning on the home's value. Reaching 80% by paying down the balance is the straightforward case. Reaching it because the home is worth more is up to the lender's rules: Fannie Mae, for instance, allows it with a new appraisal after two years at 75% of current value, or after five years at 80%.
- Check the escrow refund. Once PMI stops, unearned premiums you've paid in advance must be returned within 45 days.
Other kinds of mortgage insurance
- FHA loans charge MIP, not PMI, and these rules don't apply. With less than 10% down, MIP runs for the life of the loan; with 10% or more, 11 years. Getting out of it usually means refinancing into a conventional loan. See the FHA calculator.
- USDA loans charge an annual fee for the life of the loan, at a lower rate. See the USDA calculator.
- VA loans have no monthly mortgage insurance at all, just the one-time funding fee. See the VA calculator.
- Lender-paid PMI is built into a higher rate instead of a monthly charge. It never "cancels": the rate is the rate for the life of the loan, which is worth comparing against paying PMI and having it end. Put both on the comparison to see which costs less over the years you'll keep the loan.
Common questions
How much is PMI?
Usually about 0.5% to 1.5% of the loan a year, divided into monthly payments. It depends on your credit score and how much you put down: more down and a higher score mean less. Your Loan Estimate shows the exact figure.
Can I get PMI removed early by paying extra?
Yes, but only through the 80% request, not the automatic end. Extra payments reach 80% sooner; the automatic 78% date is fixed by the original schedule.
Does PMI removal need an appraisal?
Not if you've paid the balance down to 80% of the original value. If you're relying on the home having gained value, the lender will want one, and will have its own seasoning rules.
Is PMI tax-deductible?
The deduction for mortgage insurance premiums expired after 2021 and hasn't been renewed, so for current returns it isn't deductible. Mortgage interest still is, if you itemize; the calculator estimates that.
Should I put 20% down to avoid PMI?
That's a trade between a larger down payment now and a monthly charge that ends in a few years. The comparison puts both versions of the loan side by side, and the affordability calculator shows what each down payment lets you buy.