If you've got a conventional loan on your primary residence, you can cancel private mortgage insurance three ways. You can request it in writing once your balance is scheduled to hit 80% of the home's original value. Your servicer has to drop it automatically at 78%. And if your home has appreciated, Fannie Mae and Freddie Mac let the servicer cancel it on today's value at 75% loan-to-value after two years, or 80% after five. Usually, a letter to your servicer is the whole job. No refinance required.
Which loans can cancel PMI, and which cannot?
The Homeowners Protection Act (HPA) covers borrower-paid private mortgage insurance on a loan closed on or after July 29, 1999, secured by a single-family home that's your principal residence. It defines PMI as mortgage insurance other than FHA, VA, or USDA insurance, so everything below is for conventional borrowers.
| Loan type | Monthly insurance | Can you cancel it? |
|---|---|---|
| Conventional, borrower-paid PMI | PMI | Yes. HPA rights at 80% and 78% of original value, plus the agency current-value path |
| Conventional, lender-paid MI | Built into the loan | No. Federal law says LPMI "may not be canceled by the mortgagor." It ends at refinance or payoff |
| FHA | Annual MIP | Not by request. Case numbers since June 3, 2013: 11 years if the original loan-to-value was 90% or less, otherwise the life of the loan |
| VA | None | No monthly mortgage insurance. The funding fee is a one-time charge |
| USDA | Annual fee (0.35% for fiscal year 2027) | Outside the HPA. Not cancelable by request |
When does PMI automatically go away?
Your servicer has to terminate PMI on the date your principal balance is first scheduled to reach 78% of the original value, as long as you're current. "Scheduled" means the original amortization schedule, not your actual balance, so paying extra principal doesn't move this date.
"Original value" has a precise definition: the lesser of the contract sales price or the appraised value when you closed. That one definition is why a homeowner whose house is up 30% can still be years away from automatic termination.
There's a backstop for loans whose scheduled balance never reaches 78%, like interest-only loans: PMI has to end the month after the amortization midpoint, the 181st payment on a 30-year loan.
I tell clients the 78% rule is a floor, not a plan. Illustrative example, not an offer: on a 30-year loan that started at 90% loan-to-value, the scheduled balance doesn't reach 80% of original value until roughly year seven, and 78% until roughly year eight. A 2022 buyer waiting on automatic termination is waiting until 2030 or 2031. The statute tells you the latest date PMI can end. The rules below tell you the earliest.
Can I request PMI cancellation at 80% of my original value?
Yes. The HPA gives you the right to cancel on the date your balance is first scheduled to reach 80% of original value, or the date your actual balance reaches 80%, or any later date, if you meet four conditions:
- You submit the request in writing to your servicer.
- You have a good payment history: no 60-day late in the second year before the cancellation date and no 30-day late in the year before it.
- You're current.
- You provide the evidence the holder requires that the value hasn't dropped below the original value, and you certify there's no subordinate lien (a HELOC counts).
The statute lets you run the 80% test on your actual balance instead of the schedule, at your option, so extra principal can move that date forward.
Can I cancel PMI early because my home value went up?
This is the path most 2021-to-2023 buyers need. You won't find it in the statute. It comes from Fannie Mae and Freddie Mac servicing policy, and it uses today's value.
| Test | Fannie Mae (B-8.1-04) | Freddie Mac (8203.2) |
|---|---|---|
| Seasoned 2 to 5 years, one-unit primary or second home | Current LTV 75% or less | Current LTV 75% or less |
| Seasoned more than 5 years | Current LTV 80% or less | Current LTV 80% or less |
| Substantial improvements raised the value | Two-year seasoning waived; LTV 80% or less | Two-year seasoning waived; LTV 80% or less |
| Payment history (both paths) | Current; no 30-day late in 12 months; no 60-day late in 24 months | Same, plus no other default (taxes, upkeep, transfer of title) in 12 months |
The two guides match. "Substantial improvements" means work that extends the home's useful life (structural changes, added square footage, permitted construction), not like-for-like maintenance such as a new roof.
The math you run on your own house is two numbers: current balance divided by today's value.
The Federal Housing Finance Agency's purchase-only index rose 2.1% from the second quarter of 2025 to the second quarter of 2026. Cumulatively, a home bought in mid-2022 is up about 14.3% nationally; mid-2021, about 33.4%; mid-2023, about 11.1%. Run your own number, not the average.
Illustrative example, not an offer or a rate/APR quote. You bought in mid-2022 for $600,000 with 10% down: a $540,000 loan, original value $600,000. After four years of scheduled payments the balance is about $508,000, or 84.7% of original value, so the statutory 80% test fails. Apply the national 14.3% and today's value is about $686,000. Current-value LTV is $508,000 divided by $686,000, about 74%, which clears the 75% test.
What kind of appraisal does the servicer require, and who pays?
You don't order the valuation, and one you ordered yourself isn't the evidence either guide describes. Fannie Mae's guide requires "a property valuation based on an inspection of both the interior and exterior of the property," ordered by the servicer through Fannie Mae's own system. Freddie Mac's servicer orders its own interior-and-exterior BPO or appraisal. Neither guide accepts an online value estimate, a tax assessment, or your listing agent's comparables.
You pay. Fannie Mae's guide says the valuation "is at the expense of the borrower," and its May 13, 2026 procedure publishes the fees: $190 for a BPO, $450 for a restricted appraisal on a one-unit home, $750 for an appraisal on a two- to four-unit property. Freddie's guide says "at the Borrower's expense," and its servicers quote their own fee.
Break-even math, same illustrative example, not an offer or a quote: PMI at 0.5% a year on a $540,000 loan is about $225 a month. If the request is approved, a $190 BPO pays for itself in under a month. A $450 appraisal pays for itself in two. The fee is never the reason to wait.
How do I write the PMI cancellation request?
Most servicers post a PMI removal form in the online portal. Use it, but cover these eight things:
- Your loan number, the date, and the sentence "I request cancellation of borrower-paid private mortgage insurance under the Homeowners Protection Act, 12 U.S.C. 4902(a)."
- Which test you're invoking: 80% of original value, or the investor's current-value test and your seasoning.
- A certification that there is no subordinate lien on the property.
- A statement that the loan is current, with no 30-day late in the last 12 months and no 60-day late in the last 24.
- A request for the servicer's evidence-of-value requirement and its fee; the statute says that evidence type must be "established in advance and made known to the mortgagor" promptly on request.
- For a substantial-improvements request, attach permits, invoices, and dates.
- A request for a written decision with the grounds, which the statute requires within 30 days.
- The right recipient: your servicer, which may not be the company that made your loan if it was sold or transferred.
What if my servicer says no?
Get the grounds in writing; the HPA requires the servicer to state them within 30 days of your request or your evidence, whichever is later. Then ask three follow-ups: which investor holds the loan, which test was applied, and what valuation was used and when.
Most legitimate declines land on a short list: under two years seasoned with no qualifying improvements; a current-value LTV between 75% and 80% inside the two-to-five-year window; a HELOC on title; a 30-day late inside 12 months; a tax delinquency inside 12 months on a Freddie Mac loan; or, on a Fannie Mae original-value request, an automated value that came back low or empty, which forces a denial unless you pay for a BPO or appraisal. Most fixes are time or paperwork, not a new loan. And if the servicer applied the original-value test to a current-value request, resubmit and name the right one.
If a bank or Non-QM investor holds your loan, the 80% and 78% rules still apply; they're federal law. The current-value path is agency policy only, so ask your servicer in writing whether it offers one. Policies vary by servicer.
Can I remove FHA mortgage insurance?
Not by request. For FHA case numbers assigned on or after June 3, 2013, the annual MIP runs 11 years if your loan-to-value at origination was 90% or less, and for the full term if it was higher. Since March 20, 2023, the annual MIP on a term over 15 years at or under the conforming-limit tier is 0.50% at 95% LTV or below and 0.55% above 95%. A bipartisan bill, H.R. 5508, would let FHA MIP end at 78% LTV, but as of September 2026 it sits in committee and, as written, would apply only to loans endorsed after enactment. Don't plan around it.
You're not stuck. The exit is a refinance, usually FHA-to-conventional once today's value supports 80% LTV, weighed against an FHA Streamline on total cost. My FHA vs conventional comparison covers that trade-off.
When is refinancing the better way to drop PMI?
When the letter can't work: an FHA loan, lender-paid MI, a portfolio servicer with no current-value path, or a decline you can't fix with time. Also when a rate improvement stacks with dropping PMI, so the refinance does two jobs. Item 5 of my fall refinance checklist is the one-paragraph version of this article; should you refinance in 2026 and does refinancing restart your mortgage cover the two questions that come next. Then run the refinance calculator.
A refinance resets "original value" to the new appraisal, so at 80% LTV or below there's no PMI at all. But refinancing only to drop PMI, with no rate benefit, restarts your term and spends closing money on a charge a letter might remove for $190. Do the letter first.
FAQ
Does paying extra principal cancel PMI sooner? It can move the 80% request date, which you may invoke on that date "or any later date" you qualify. It doesn't move the 78% automatic date.
Does a HELOC stop me from canceling PMI? Yes, on the HPA request, which requires certifying there's no subordinate lien. Pay it off and close it, or wait for the 78% automatic date, which has no lien test.
Terms like LTV, BPO, and servicer are in the glossary.
Run Your PMI Numbers With Randy
Math is what I do. Send me your balance, your purchase price, and your closing date, and I'll tell you which test you're likely to clear and what to write. If a letter is all you need, I'll say so. If a refinance would do more than drop PMI, I'll show you the break-even. No obligation. Call or text (949) 990-6030, or schedule a call. Knowledge is power.
