Guide · 6 min read
PMI Cancellation: When You Can Ask
Private mortgage insurance protects the lender, not you. It ends on a schedule the lender controls — but there are two points on that schedule where you can act.
PMI ends automatically when your balance reaches 78% of the original value. You can ask for it at 80% — and on a typical loan that gap is several months of payments you do not have to make.
PMI is charged as a percentage of the original loan balance, split across twelve monthly payments. On a $450,000 loan at 0.6%, that is $2,700 a year, or $225 a month — money that buys you nothing once the lender no longer needs the protection.
The Homeowners Protection Act sets two thresholds. At 80% loan-to-value you may ask the servicer to cancel. At 78% it must cancel automatically. The arithmetic of an amortizing loan determines when each arrives.
The two thresholds are not close together
The percentage sounds like a rounding difference. It is not, because the last few percent of a mortgage take a long time to repay.
On a $450,000 loan against a $500,000 home — 90% LTV at origination — the balance reaches 80% of the value in February 2035, nine and a half years in. It reaches 78% in April 2036, another fourteen months later. That gap is $225 a month, or roughly $3,150 you hand over for the privilege of waiting.
What requesting cancellation requires
Reaching 80% LTV is necessary but not sufficient. The servicer will also check that the loan is current, that no subordinate lien exists, and that you have a good payment history. Some will require a new appraisal, at your expense, if values have moved a lot since origination.
Ask in writing and keep the date. A request made by phone has a way of not existing when you follow up three months later.
- Loan is current — no payments behind.
- No second mortgage or home equity line attached to the property.
- No delinquencies in the past 12 months, and typically no more than one 30-day late in the past 24.
- The servicer can demand evidence of value if it believes the property has fallen.
The trap in "original value"
Both thresholds are measured against the original property value or the original purchase price, whichever is lower — not against what the home is worth today. A market that has risen does not speed up your cancellation by itself.
This cuts both ways, and the second way is worth knowing: if your home has appreciated substantially, a new appraisal can sometimes establish a higher value and move the 80% line much closer. That is worth asking about explicitly when you call.
When the insurance never ends
FHA loans are different. On a Federal Housing Administration mortgage with less than 10% down, the annual premium runs for the entire term — there is no automatic cancellation at 78%. The only way out is to refinance into a conventional loan once you have enough equity.
That distinction is worth tens of thousands of dollars and is the single most important thing to understand before choosing between the two loan types.
Frequently asked questions
Can I get PMI removed earlier by paying down the loan?
You can request cancellation at 80% LTV, and extra principal gets you there sooner. The same extra payments that shorten the term also pull the cancellation date forward — often by years rather than months.
Does PMI always end at 78%?
For conventional loans with a borrower-paid premium, yes — that is the automatic termination point set by federal law. For FHA loans with a small down payment, no: the annual premium continues for the life of the loan unless you refinance.
What if my home value has gone up a lot?
Ask the servicer whether a new appraisal can be used. It costs money and not every loan allows it, but on a property that has appreciated sharply it can move the 80% threshold years closer. It never changes the automatic 78% date, which is fixed to the original value.