When Does PMI Go Away? The 78%, 80%, and Midpoint Rules

On a conventional mortgage, PMI goes away automatically once your loan balance is scheduled to reach 78% of the home’s original value, and you can ask your servicer to cancel it earlier at the 80% mark. Those thresholds come from a federal law called the Homeowners Protection Act, which sets the equity milestones every servicer must honor. The answer changes if you have an FHA loan, lender-paid mortgage insurance, or a loan on a second home or rental, so the type of financing you carry decides exactly when and how the premiums stop.

Automatic Termination at 78% of Original Value

Your servicer must stop charging PMI on the date your loan balance is first scheduled to reach 78% of the home’s original value, based on the original amortization schedule.¹ “Original value” means whichever is lower: the price you paid or the appraised value at closing.² You don’t have to request this. It happens on its own.

One condition applies: you have to be current on your payments when that scheduled date arrives. If you’re behind, PMI keeps running until the first day of the month after you catch up.¹ The trigger is the scheduled balance, not the actual one, so extra principal payments that pushed your real balance below 78% do not by themselves move the automatic date.

Requesting Cancellation at 80% of Original Value

You can get out of PMI sooner. Under the Homeowners Protection Act, once your balance reaches 80% of the home’s original value, you have the right to submit a written cancellation request.² That 80% point can be based either on the original amortization schedule or on actual payments you’ve made, including extra principal that got you there faster.³

Unlike automatic termination, this route puts the burden on you. The request has to be in writing, your payment history has to be good, the property must be free of subordinate liens like a second mortgage or HELOC, and in some cases you’ll need to show that the home’s value hasn’t fallen below its original value.² If you’ve been paying extra and tracking your balance, this can spare you months of premiums compared with waiting for the 78% date.

Cancellation Based on Current Market Value

If your home has appreciated, you may reach the equity threshold long before your loan balance does. For loans owned by Fannie Mae, you can request PMI cancellation using current appraised value, though the ratios are tighter and the timeline matters:

Two to five years of ownership: your balance must be 75% or less of the current appraised value.
More than five years of ownership: your balance must be 80% or less of the current appraised value.
Substantial improvements that raised the home’s value can waive the two-year waiting period, with the required ratio at 80% or less.

Routine maintenance and minor repairs don’t count as substantial improvements.⁴ Using current value requires a full interior-and-exterior appraisal ordered through your servicer, and you’ll pay for it.

The Midpoint Safety Net

PMI cannot run forever. Even if your balance never reaches 78%, your servicer must stop charging PMI on the first day of the month after the midpoint of the loan’s amortization period.¹ On a 30-year mortgage, that’s the 15-year mark. This rule matters most for loans that were modified or that went through negative amortization. You still need to be current on payments when the midpoint arrives.

Payment History Requirements

Both automatic termination and borrower-initiated cancellation require what the statute calls a “good payment history”:

No payments 30 or more days late in the 12 months before the cancellation or termination date.
No payments 60 or more days late in the 12-month period that starts 24 months before that date.

In plain terms, your record over roughly the past two years is what counts.² For a cancellation request, the servicer will also verify there are no subordinate liens and may ask for certification that the home’s value hasn’t dropped. If an appraisal is required, it typically has to come from an appraiser on the servicer’s approved panel or through the servicer’s valuation system.⁴

How to Submit a Cancellation Request

Start with your most recent mortgage statement or online account to confirm the current principal balance. Compare it to 80% of the home’s original value, meaning the lower of your purchase price or the appraised value at closing. If your balance is at or below that number, you’re eligible to ask.

Your written request should include the mortgage account number, the property address, and a clear statement that you’re requesting PMI cancellation because the balance has reached 80% of original value. Send it to your loan servicer, which is the company that collects your monthly payments, not the original lender if they’re different. Certified mail with return receipt gives you a verifiable record of when the request was received. Many servicers accept the request through their online portals as well.

If a new appraisal is required, which is common when you’re relying on current market value rather than the original amortization schedule, arrange it through a provider the servicer approves. After the servicer has your request and any supporting documentation, expect a review period while they verify your payment history, check for subordinate liens, and confirm the property’s value.

Refunds and Payment Changes After Removal

Once PMI is canceled or terminated, your servicer cannot keep collecting premiums beyond 30 days after the later of receiving your cancellation request or your meeting all eligibility requirements. Any unearned premiums already collected must be refunded within 45 days of the termination or cancellation date.¹

Your monthly payment should drop by the PMI amount. If you escrow, the PMI portion that was being set aside may briefly show as a surplus. Some servicers run a new escrow analysis right away and adjust the payment, while others apply the surplus at the next annual escrow review.⁴ Check the statement after your cancellation date to confirm the PMI charge is gone, and contact your servicer if the adjustment hasn’t happened within 30 days.

Loans These Rules Don’t Cover

The Homeowners Protection Act applies only to conventional mortgages on single-family homes used as a principal residence.³ If the loan is on a second home or investment property, the automatic termination and borrower-initiated cancellation rights don’t apply, though the loan’s investor may still allow removal under its own servicing guidelines.

Lender-Paid Mortgage Insurance

With lender-paid mortgage insurance (LPMI), the cost is built into your interest rate rather than showing up as a monthly premium. LPMI can’t be canceled by the borrower and is not subject to the Homeowners Protection Act’s automatic termination rules.⁵ Ending it means refinancing, paying off the loan, or otherwise closing out the mortgage. Your servicer is required to notify you after the date that would have been the automatic termination point, so you know refinancing is an option.

FHA Mortgage Insurance

FHA loans carry their own mortgage insurance premiums (MIP), governed by HUD rules rather than the HPA. For FHA loans with case numbers assigned on or after June 3, 2013, how long annual MIP lasts depends on the down payment:

Down payment of 10% or more (LTV at or below 90%): annual MIP lasts 11 years, then drops off automatically.
Down payment of less than 10% (LTV above 90%): annual MIP lasts for the life of the loan.

There is no equivalent to the conventional 80% cancellation request for FHA MIP.⁶ If you have life-of-loan FHA MIP and want to be rid of it, the realistic option is refinancing into a conventional mortgage once you have at least 20% equity.

VA Loans

VA-backed home loans carry no monthly mortgage insurance. Most VA borrowers pay a one-time funding fee at closing instead.⁷ There are no ongoing premiums to cancel.

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
Office of the Law Revision Counsel. 12 USC Chapter 49 – Homeowners Protection
4
Fannie Mae. Termination of Conventional Mortgage Insurance
5
Consumer Financial Protection Bureau. Homeowners Protection Act PMI Cancellation Act Procedures
6
U.S. Department of Housing and Urban Development. Mortgagee Letter 2013-04 – Revision to FHA MIP Duration
7
Veterans Affairs. VA Funding Fee and Loan Closing Costs