How Long Does PMI Last and When Can You Remove It?

On a conventional loan, private mortgage insurance usually lasts somewhere between 5 and 13 years, depending on your loan term, interest rate, and down payment. Federal law sets the outer limits: your servicer must remove PMI automatically once your scheduled loan balance drops to 78 percent of the home’s original value, and you can ask for it to come off earlier once you reach 80 percent. Extra principal payments, rising home values, or a refinance can shorten that window further.

Automatic Removal at 78 Percent of Original Value

Your lender is required to cancel PMI on its own once your loan balance is scheduled to reach 78 percent of the home’s original value, based on the amortization schedule you started with.¹ On a $300,000 purchase, that means a scheduled balance of $234,000. No paperwork is needed on your end.

“Original value” is the lower of your purchase price or the appraised value at the time you bought the home.² The word “scheduled” matters. Even if you’ve paid extra and your actual balance is already below 78 percent, the automatic date still follows the original timeline unless you submit a separate request.

One condition: you have to be current on payments when the scheduled date arrives. If you’re behind, termination is delayed until the month after you catch up.¹

Requesting Cancellation at 80 Percent

You don’t have to wait for the automatic date. Federal law gives you the right to request cancellation once your balance reaches 80 percent of the home’s original value, whether you got there through scheduled payments or extra ones.³ For borrowers who make extra principal payments, this can shave months or years off the PMI timeline.

To qualify under the Homeowners Protection Act, you need to meet four requirements:¹

Submit the request in writing to your loan servicer.
Have a clean recent payment history: no payments 30 or more days late in the past 12 months, and no payments 60 or more days late in the 12 months before that.⁴
Be current on your payments at the time you ask.
If the lender requires it, provide evidence (typically an appraisal) that the home’s value hasn’t fallen below original value, and certify that no other liens, such as a second mortgage or HELOC, are attached to the property.

Once you meet these conditions, the servicer has to stop collecting PMI within 30 days after the later of receiving your written request or your satisfaction of the evidence and certification requirements.⁵ If the servicer says you don’t qualify, it must give you a written explanation within 30 days along with any appraisal results it relied on.

Note the stricter thresholds for two- to four-unit buildings and investment properties: borrower-requested cancellation on original value generally requires a 65 percent loan-to-value ratio (35 percent equity), and current-value cancellation typically requires 70 percent with at least two years of seasoning.⁶

Cancelling Earlier If Your Home Has Appreciated

The rules above are tied to original value. If your home has gained value since you bought it, you may be able to cancel PMI based on the current value even though your scheduled balance is still above 80 percent of the original price. This path isn’t in the federal statute; it comes from the guidelines of the entity that owns your loan, most often Fannie Mae or Freddie Mac.

Fannie Mae’s guidelines for a single-unit primary residence or second home allow cancellation based on current value under these conditions:⁶

Between two and five years of seasoning: current loan-to-value ratio of 75 percent or less, based on a new appraisal.
More than five years of seasoning: current loan-to-value ratio of 80 percent or less.
If you made improvements that increased the home’s value and the two-year seasoning is waived: 80 percent or less.

The same clean payment history rule applies, and the appraisal must include an interior and exterior inspection. Call your servicer to find out which investor owns your loan and which specific thresholds apply.

The Midpoint Backstop

Federal law includes a hard ceiling: PMI cannot outlast the halfway point of your loan term, no matter what your balance is. If it hasn’t already been removed by one of the routes above, your lender must terminate PMI on the first day of the month after you hit the midpoint of your amortization period, as long as you’re current on payments.¹

On a 30-year mortgage, that’s 15 years in. On a 15-year mortgage, it’s 7.5 years. This mostly matters for borrowers whose amortization got stretched by a modification or a payment deferral, where the 78 percent trigger might otherwise arrive much later than originally planned.

High-Risk Loans Only Get the Midpoint Rule

Some loans classified as “high risk” at origination don’t get the standard 80 percent cancellation right or 78 percent automatic termination. They follow only the midpoint rule.⁷ For conforming loans, the high-risk determination follows Fannie Mae and Freddie Mac guidelines; above the conforming limit, the lender decides. If your loan is in this category, you should have received a written notice at closing saying so.

Lender-Paid Mortgage Insurance Doesn’t Come Off

Not every mortgage insurance arrangement can be cancelled. With lender-paid mortgage insurance, the lender buys the policy and charges you through a higher interest rate rather than a separate monthly premium. Because there’s no separate premium, the Homeowners Protection Act’s cancellation and automatic termination rules don’t apply.⁸

Lender-paid coverage ends only when the loan does, whether through payoff, refinance, or another form of termination. The elevated interest rate stays with you for the life of that loan.⁸ Your servicer must send you a written notice around the date that would have been your automatic termination date under borrower-paid PMI, letting you know that refinancing may be worth a look.⁹

FHA and USDA Loans Follow Different Rules

The Homeowners Protection Act only covers conventional loans with private mortgage insurance. FHA, USDA, and VA loans work differently.

FHA Mortgage Insurance

For FHA loans originated after June 3, 2013, the duration of the annual mortgage insurance premium depends on your down payment:

Less than 10 percent down: the annual premium lasts the entire life of the loan. Refinancing into a conventional loan or paying off the mortgage is the only way to eliminate it.
10 percent or more down: the annual premium drops off after 11 years of on-time payments.

FHA mortgage insurance has no equity-based cancellation right and no automatic termination at 78 or 80 percent. For borrowers with less than 10 percent down who want out, refinancing into a conventional loan once they have at least 20 percent equity is the usual path.

USDA Guaranteed Loans

USDA guaranteed loans charge an annual fee that runs for the entire loan term. It continues until the mortgage matures, is paid off early, or terminates through foreclosure or a similar event.¹⁰ There is no equity-based cancellation. Refinancing into a conventional loan is again the main exit.

When Refinancing Makes Sense

If you’ve built significant equity through appreciation but don’t yet qualify for cancellation, or if you have an FHA or USDA loan where cancellation isn’t an option, refinancing into a new conventional loan can end mortgage insurance outright. On the new loan, “original value” resets to the appraised value at the time of the refinance.³ If the new loan is 80 percent or less of that fresh appraisal, you start without any PMI requirement.

Refinancing works best when the PMI savings, together with any interest rate improvement, outweigh the closing costs, which typically run 2 to 5 percent of the loan amount. If you’re already close to the 78 or 80 percent threshold on your current loan, requesting cancellation is almost always cheaper than refinancing.

1
Office of the Law Revision Counsel. 12 USC 4902 – Termination of Private Mortgage Insurance
2
Office of the Law Revision Counsel. 12 USC Chapter 49 – Homeowners Protection
3
Consumer Financial Protection Bureau. When Can I Remove Private Mortgage Insurance (PMI) From My Loan
4
Office of the Law Revision Counsel. 12 USC Chapter 49 – Homeowners Protection – Section 4901
5
Consumer Financial Protection Bureau. Homeowners Protection Act HPA PMI Cancellation Act Procedures
6
Fannie Mae. Termination of Conventional Mortgage Insurance
7
Office of the Law Revision Counsel. 12 USC Chapter 49 – Homeowners Protection – Section 4902(g)
8
Federal Deposit Insurance Corporation. V-5 Homeowners Protection Act
9
National Credit Union Administration. Homeowners Protection Act (PMI Cancellation Act)
10
USDA Rural Development. Chapter 16 – Closing the Loan and Requesting the Guarantee