On a covered conventional mortgage, federal law gives you the right to request cancellation of private mortgage insurance once the balance is scheduled to reach 80 percent of the home’s original value, and it requires your servicer to terminate the coverage automatically at 78 percent. Most homeowners paying PMI do not know that, so they treat it as a permanent feature of the loan and keep paying past the date it could have come off.
It is not permanent. It has statutory end points, and the servicer carries obligations on those dates whether or not you call. This guide covers the four routes off PMI, what “original value” means, why a rising home value does not shorten the statutory clock, and the distinction that matters most: FHA mortgage insurance is a different system and generally does not cancel the same way.
When can you remove PMI?
Conventional mortgage insurance can end at four points, each on a different trigger. The Consumer Financial Protection Bureau describes the statutory framework as applying to mortgages on single-family principal residences that closed on or after July 29, 1999. Lender-paid mortgage insurance follows different rules, and FHA and VA loans sit outside the framework entirely.
| Route off PMI | What triggers it | Conditions that apply |
|---|---|---|
| Borrower-requested cancellation at 80% | The date the balance is scheduled to reach 80% of original value, or earlier with extra principal payments | Written request; good payment history and current; certify no junior liens; show the value has not declined below original value |
| Automatic termination at 78% | The date the balance is scheduled to reach 78% of original value | Must be current on that date; otherwise coverage ends shortly after payments are brought current |
| Final termination at the midpoint | The first month after the midpoint of the original amortization schedule, year 15 of a 30-year loan | Applies even if the balance has not reached 78%; must be current |
| Current-value termination or refinance | A borrower-initiated request based on today’s appraised value, or a new loan without mortgage insurance | Set by the investor and servicer, not the statute; seasoning, LTV and payment tests apply |
The first three are rights; the fourth is a program with its own conditions. The statutory rules are a floor rather than a ceiling; investors including Fannie Mae and Freddie Mac write their own cancellation guidelines, and the CFPB notes those cannot be less favorable to the borrower.
To find which date applies to you, our mortgage insurance removal calculator shows where an amortization schedule crosses 80 and 78 percent.
How do you request PMI cancellation at 80 percent?
You send a written request to your servicer, and the servicer is legally required to grant it if you meet four conditions. It is the fastest route off PMI, but only if you ask.
The CFPB lists the four conditions a servicer must honor: the request is in writing, you have a good payment history and are current, you can certify there are no junior liens such as a second mortgage or home equity line, and you can show the value has not declined below original value. That last condition is why an appraisal sometimes enters the picture even on the ordinary 80 percent route.
The date you may make the request should appear on the PMI disclosure form you received at closing, and you need not wait for the schedule: if extra principal payments have already brought the balance to 80 percent of original value, you can ask now. The junior-lien condition catches most people: a second mortgage or home equity line taken out after closing can block an otherwise qualifying request.
What does ‘original value’ mean, and does appreciation count?
Original value means the lesser of the contract sales price or the appraised value at the time you bought the home, and if you have refinanced since, the appraised value at that refinance. It does not update as the market moves.
This is the most misunderstood part of PMI removal, and in coastal Orange County it costs homeowners real money. A Seal Beach or Huntington Beach owner watching prices climb reasonably assumes the equity position has improved enough to drop the coverage. Under the statutory rules, it has not. Those thresholds are measured against a number fixed years ago, and only paying the balance down moves you toward them.
FHFA’s data shows how wide the gap can get. Announcing the 2026 conforming loan limit values, the agency reported that U.S. house prices rose 3.26 percent on average between the third quarters of 2024 and 2025, and set the baseline one-unit limit at $832,750 with a high-cost ceiling of $1,249,125, the ceiling that applies in Orange County. For a specific region, check the FHFA House Price Index rather than an impression of the market.
Appreciation is real. It just does not reach the statutory clock; it reaches a different route.
Can a new appraisal or a refinance remove PMI sooner?
Yes, through the investor’s current-value program or through a new loan, both outside the statutory rules. This is where appreciation finally counts.
Fannie Mae’s Servicing Guide sets out a borrower-initiated termination based on current value with specific tests. For a one-unit principal residence or second home, the loan-to-value ratio must be 75 percent or less at two to five years of seasoning, or 80 percent or less beyond five years. For a one- to four-unit investment property or a two- to four-unit principal residence, it must be 70 percent or less with more than two years of seasoning. The payment record has to be clean: current when the request is made, no payment 30 or more days late in the last 12 months, and none 60 or more days late in the last 24.
Three details matter. The servicer is not permitted to solicit you for this, so the request must come from you. The valuation is ordered by the servicer through Fannie Mae’s system, based on an interior and exterior inspection; you cannot supply an appraisal of your own choosing. And where the two-year seasoning requirement is waived because improvements you made raised the value, the threshold is 80 percent rather than 75. Other investors have comparable rules, so ask your servicer which guidelines govern your loan.
The other exit is a new loan. A refinance replaces the existing mortgage, and if the new loan’s LTV is low enough it carries no mortgage insurance. That is a different transaction, though (new rate, new term, new closing costs, new underwriting), and whether it makes sense depends on the rate you hold, how long you plan to stay, and what the new loan would cost.
Does FHA mortgage insurance go away the same way?
No. FHA mortgage insurance premiums follow HUD’s rules rather than the conventional PMI framework, and on most modern FHA loans with a low down payment the annual MIP lasts the life of the loan.
HUD set the current structure in Mortgagee Letter 2013-04. For FHA case numbers assigned on or after June 3, 2013, the annual MIP is collected for the maximum duration the statute permits: where the original LTV was 90 percent or less, until the end of the term or the first 11 years, whichever comes first; where it was above 90 percent, until the end of the term or the first 30 years. A 30-year FHA loan with the minimum 3.5 percent down falls in that second category, so the premium runs the length of the loan. The controlling policy source is the FHA Single Family Housing Policy Handbook 4000.1, and the CFPB is explicit that FHA and VA loans carry different requirements.
| Conventional PMI | FHA annual MIP | |
|---|---|---|
| Governing rules | Federal framework for covered loans, plus investor guidelines | HUD policy: Handbook 4000.1 and Mortgagee Letter 2013-04 |
| Request at 80% of original value | Yes, on covered loans meeting the conditions | No equivalent right |
| Automatic end at 78% | Yes, on covered loans, if current | No |
| Duration by original LTV | Not a duration driver; the statutory thresholds control | Above 90%: up to 30 years or the end of the term. 90% or less: 11 years or the end of the term |
| Usual exit when it will not cancel | Current-value termination, or refinance | Refinance into a conventional loan |
The practical answer for an FHA borrower is different. Waiting does not remove the premium and neither does building equity; refinancing into a conventional loan is the ordinary route out, and that turns on the same variables as any other refinance. Our overview of FHA loans covers how the program is structured on the front end.
What should you check before you contact your servicer?
Gather four things and the conversation gets shorter.
- Your loan type: conventional with borrower-paid PMI, conventional with lender-paid MI, or FHA. Lender-paid MI does not cancel on request.
- Your original value: the lesser of purchase price or appraisal at purchase, or the appraised value at your last refinance.
- Your balance and amortization schedule: the 80 and 78 percent dates run off the schedule, not the statement balance.
- Your junior liens and payment history: a second mortgage or recent late payments can disqualify a valid request.
Then ask three questions with definite answers: what is the scheduled automatic-termination date, what is the earliest date I may request cancellation, and which investor guidelines apply.
Frequently asked questions
When can I remove PMI from a conventional loan?
You may request cancellation on the date the balance is scheduled to reach 80 percent of original value, and on a covered loan the servicer must terminate it automatically at 78 percent if you are current. Extra principal payments move the request date earlier.
Does PMI automatically fall off?
Yes, on covered conventional loans. The servicer must terminate coverage when the scheduled balance reaches 78 percent of original value and you are current, and no later than the month after the midpoint of the amortization schedule even if it has not.
Will a new appraisal get rid of PMI?
It can, but under the investor’s program rather than the statutory rules, and the tests are stricter. Fannie Mae requires an LTV of 75 percent or less at two to five years of seasoning and 80 percent or less after five, with the servicer ordering the valuation.
Does FHA mortgage insurance go away at 20 percent equity?
No. FHA annual MIP follows HUD’s duration rules: on loans with case numbers assigned on or after June 3, 2013 with an original LTV above 90 percent, it runs up to 30 years or the end of the term. Equity alone does not end it.
What is the difference between PMI and MIP?
PMI is private mortgage insurance on a conventional loan, arranged by the lender and provided by private insurers, as the CFPB explains in its overview of what private mortgage insurance is. MIP is the FHA’s own premium. The two carry different cancellation rules.
Can a second mortgage stop me from cancelling PMI?
Yes. Certifying there are no junior liens is one condition of a borrower-requested cancellation, so an open second mortgage or home equity line can block an otherwise qualifying request.
Talk through where your loan actually stands
The rules above are statutory and program requirements, not an offer or a commitment of credit. Loans vary, investor and servicer requirements can add conditions, and your mortgage’s terms control. The Taylor Weiner Team is a mortgage lending team based in Seal Beach, lending across California.
Call or text (714) 658-4912, email tweiner@twteam.com, or contact our team. The office is at 1650 Pacific Coast Highway Unit C, Seal Beach, CA 90740. Phones are open Monday through Friday, 8:30am to 7:30pm PST; apply online any time.
Taylor Weiner NMLS 263090 · Lower, LLC · NMLS ID# 1124061 · Equal Housing Opportunity · nmlsconsumeraccess.org · Not an offer of credit or commitment to make a loan; all approvals are subject to underwriting guidelines.
