How to Remove PMI: Cancellation, Appraisal, and Refinancing

To remove PMI from a conventional mortgage, send your loan servicer a written cancellation request once your balance reaches 80% of the home’s original value. If you don’t ask, federal law still requires the lender to end private mortgage insurance automatically when your scheduled balance hits 78%. Either way, the goal is the same: stop paying a premium that protects the lender and gives you nothing in return.

PMI typically runs between 0.46% and 1.50% of the loan amount per year depending on your credit score and down payment. On a $300,000 mortgage, that’s roughly $115 to $375 a month. Cutting it a year or two early can save thousands.

Request Cancellation in Writing at 80% LTV

The Homeowners Protection Act gives you the right to request cancellation once your loan balance reaches 80% of the home’s original value.¹ “Original value” is the lesser of your purchase price or the appraised value at closing.² You can get to 80% through your regular amortization or by making extra principal payments; the statute recognizes both.

You have to meet four conditions:

Submit the request in writing. A phone call doesn’t trigger your rights under the statute.
Have a clean recent payment record: no payments more than 30 days late in the last 12 months, and none more than 60 days late in the 12 months before that.
Be current on your mortgage when you submit the request.
Provide evidence, if the lender asks, that the property value hasn’t fallen below its original value, and certify that no second mortgage or home equity line is attached to the property.

That last point catches people. A home equity line of credit opened after purchase can block cancellation even if the HELOC balance is zero, until the subordinate lien is released.¹

Send the request by certified mail with return receipt requested. That gives you a confirmed delivery date, which matters because it starts the servicer’s response clock. The lender must tell you within 30 days whether the request was approved or denied, with the specific reasons and any appraisal results if denied.³

Use Your Home’s Current Value if It Has Appreciated

The 80% original-value rule is the federal baseline. Fannie Mae also lets servicers cancel PMI based on the home’s current market value, which can be a faster route if your neighborhood has gained ground since you bought. The equity thresholds are stricter, and they depend on how long you’ve held the loan:

Between two and five years of ownership: current LTV of 75% or less for a primary residence or second home.
More than five years of ownership: current LTV of 80% or less.
Investment properties and multi-unit homes: 70% or less, with at least two years of ownership.

These thresholds apply only when you initiate the request. The servicer will order an appraisal through Fannie Mae’s system covering both interior and exterior inspection.⁴ The same payment history rules apply as with the 80% cancellation route.

If your loan is less than two years old, the seasoning rule generally blocks this path. The exception is substantial improvements.

The Renovation Exception

Major renovations can waive the two-year seasoning requirement and let you request cancellation based on current appraised value. The improvements have to meaningfully increase market value: a kitchen or bathroom overhaul, added square footage, a finished basement. Routine maintenance like repainting, replacing carpet, or fixing a roof does not qualify.⁴ When the waiver applies, the LTV threshold for a one-unit primary residence or second home is 80% rather than 75%. Keep receipts and permits; the lender will want them alongside the new appraisal.

Expect to Pay for an Appraisal

Whether you’re using original value or current value, the lender will almost always require a professional appraisal. You don’t choose the appraiser: the lender assigns one from an approved panel. A standard single-family appraisal runs about $300 to $500, higher in expensive markets or for larger properties. You pay upfront, and the fee is nonrefundable even if the number comes back too low.

Before ordering, check recent comparable sales in your neighborhood yourself. If the numbers look tight, waiting a few months for more principal paydown or additional appreciation is often smarter than paying for an appraisal that falls short.

Automatic Termination at 78%

If you never write the letter, PMI still has to come off on its own. The lender is required to end it once the loan balance is scheduled to reach 78% of the original property value under your original amortization schedule.¹ The word “scheduled” is doing real work in that sentence. Automatic termination follows the original payment plan and ignores extra payments you’ve made or appreciation you’ve gained.

That’s why the 80% written-request route matters. It is the only way to get credit for extra principal payments or a higher home value before the automatic date arrives. To qualify for automatic termination, you only need to be current on payments; if you’re behind on that date, PMI ends on the first day of the month after you catch up.

Refunds and Confirmation After PMI Ends

Once PMI is off, your servicer has to refund any unearned premiums within 45 days.⁵ Within 30 days, you should also receive written confirmation that PMI has ended and no further insurance payments are due.³

Check the mortgage statement the following month. The PMI line item should be gone. If it’s still there, write to the servicer immediately and keep a copy.

When the Standard Rules Don’t Apply

The path above assumes a standard borrower-paid PMI arrangement on a conventional mortgage. Several common situations sit outside it.

High-Risk Loans

Some conventional loans are classified as “high risk” at origination and do not qualify for the standard 80% cancellation or 78% automatic termination. For conforming loans within Fannie Mae and Freddie Mac limits, the enterprises define which loans are high risk. For nonconforming jumbo loans, the lender sets the classification. You should have received a disclosure at closing if your loan was flagged this way. For nonconforming high-risk loans, PMI must terminate when the scheduled balance reaches 77% of original value.⁵

Lender-Paid PMI

If you took a loan where the lender pays PMI in exchange for a higher interest rate, you cannot cancel it. The cost is embedded in your rate for the life of the loan, and the Homeowners Protection Act’s cancellation provisions do not apply.³ The only exit is refinancing.

FHA Loans

The Homeowners Protection Act applies to conventional mortgages only. FHA loans carry mortgage insurance premiums under a separate regime. For loans originated on or after June 3, 2013, whether the annual MIP can ever come off depends on your original down payment. Put 10% or more down, and MIP can be removed after 11 years of on-time payments. Put less than 10% down, and MIP stays for the life of the loan. The only way out of life-of-loan MIP is refinancing into a conventional mortgage once you have at least 20% equity.

VA Loans

VA-backed loans never carry monthly mortgage insurance. Eligible borrowers pay a one-time funding fee at closing that can be financed into the loan.⁶ There’s nothing monthly to remove. If you’re paying PMI on a conventional loan and you’re VA-eligible, refinancing into a VA mortgage eliminates the premium.

Refinancing to Get Rid of PMI

Refinancing replaces your existing mortgage with a new one. If the new loan is 80% or less of the home’s current appraised value, it won’t carry PMI at all. This works best when your property has appreciated enough to push your equity past 20% even though scheduled payments haven’t gotten you there.

The cost is real. Closing costs typically run 2% to 6% of the new loan amount. On a $300,000 refinance, that’s $6,000 to $18,000. Divide the closing costs by your monthly PMI savings to find your break-even point in months. If you plan to stay in the home well past that point, refinancing can pay off. If you might sell within a couple of years, it usually won’t.

Interest rates change the calculation. Refinancing into a rate even half a point higher than your current one can erase the PMI savings. The best case is a borrower who locked in a higher rate, has since gained substantial equity, and can drop both the rate and the premium at the same time.

If Your Servicer Won’t Comply

If you’ve met every requirement and the servicer is still charging PMI, or is ignoring your written request, you have federal recourse. Send a follow-up letter by certified mail referencing the Homeowners Protection Act and the date of your original request. Keep every piece of correspondence.

If that doesn’t work, file a complaint with the Consumer Financial Protection Bureau online or by calling (855) 411-2372. The CFPB forwards the complaint to the company, which generally has 15 days to respond and up to 60 days in complex cases. You can review the response and add feedback.⁷

Most PMI disputes at this stage involve servicers who miscalculated the amortization schedule, failed to credit extra principal payments, or didn’t process a cancellation request they should have. Your certified mail receipt and written request are the evidence that gets the problem fixed.

1
Office of the Law Revision Counsel. 12 USC 4902 – Termination of Private Mortgage Insurance
2
Office of the Law Revision Counsel. 12 USC 4901 – Definitions
3
National Credit Union Administration. Homeowners Protection Act (PMI Cancellation Act)
4
Fannie Mae. Termination of Conventional Mortgage Insurance
5
CFPB Consumer Laws and Regulations. HPA – Homeowners Protection Act (PMI Cancellation Act) Procedures
6
Veterans Affairs. VA Funding Fee and Loan Closing Costs
7
Consumer Financial Protection Bureau. Learn How the Complaint Process Works