How to Get Rid of PMI When Your Home Value Increases

If your home has gained value, you can ask your mortgage servicer to cancel private mortgage insurance based on the current appraised value rather than waiting for your loan balance to drop on its own. Getting rid of PMI when your home value increases means sending a written request to your servicer, meeting the loan-to-value threshold that matches how long you’ve held the loan, and paying for an appraisal the servicer orders. Lenders rarely bring this up on their own, so the request has to come from you.¹

The route described here runs through servicing guidelines set by Fannie Mae and Freddie Mac, which back the majority of conventional mortgages.² If your loan is held in a lender’s own portfolio, the lender’s own policies control, and you’ll need to ask your servicer about their process.

The Equity Threshold Depends on How Long You’ve Had the Loan

When you use your home’s current value to cancel PMI, how much equity you need depends on the loan’s age, called its “seasoning.” For a single-family primary residence or second home, Fannie Mae and Freddie Mac use nearly identical tiers:²

Less than 2 years: market appreciation alone generally doesn’t qualify. The two-year minimum can be waived if you made substantial improvements, such as a kitchen or bath renovation or added square footage, in which case the LTV must be 80% or less.
2 to 5 years: the LTV must be 75% or less, meaning at least 25% equity based on the current appraised value.
More than 5 years: the LTV must be 80% or less, matching the familiar 20% equity figure.

Routine upkeep like repainting, patching a roof, or replacing worn carpet does not count as the kind of improvement that waives the two-year wait. The work has to meaningfully add to marketability or livable space.²

To check where you stand, divide your current loan balance by your estimated current value. Owe $300,000 on a home now worth $400,000, and your LTV is 75%, enough for the 2-to-5-year tier but not the 80% tier for newer loans. At $425,000 the LTV drops to about 70.6%, clearing the threshold on either tier. Recent comparable sales in your neighborhood will tell you whether an appraisal is likely to come in where you need it before you pay for one.

Other Boxes You Have to Check

Reaching the LTV threshold isn’t enough on its own. Your servicer will also confirm three things before approving the request:³

Payment history: no payments 30 or more days late in the past 12 months, and none 60 or more days late in the past 24 months.⁴
Current status: you must be up to date on the mortgage when you submit the request, with no past-due balance.
No subordinate liens: you’ll need to certify that no second mortgage, home equity line of credit, or other junior lien sits on the property. A HELOC with a zero balance may still count as an open lien, so check with your servicer.⁵

One more wrinkle: if the property’s value has fallen below what it was worth when you purchased it, the servicer may deny the request even if your loan balance alone would suggest a healthy LTV.³ That mostly comes up when a local market rose and then slipped back, so confirm recent comparable sales before you apply.

How to Submit the Request

Send a written request to your servicer, the company you send monthly payments to, asking for PMI cancellation based on the home’s current value. Include your mortgage account number, the property address, your estimate of current value, and a description of any improvements since closing.² Certified mail with return receipt gives you a dated record of delivery, which matters because federal timing rules run from that date. Many servicers also accept requests through their online portals.

The Appraisal

Your servicer will not accept an appraisal you order yourself. Instead, the servicer arranges an independent appraisal or broker price opinion (BPO) at your expense. A standard single-family appraisal usually runs $300 to $600, varying by location and property complexity. A BPO, in which a licensed real estate professional estimates value from comparable sales and a brief inspection, generally costs less, often $50 to $250. Not every servicer offers the BPO option, so ask which methods yours accepts when you send the request.

Document Any Improvements Before the Appraisal

If you’re relying on renovations to support a higher valuation, especially to get around the two-year seasoning rule, pull your documentation together before the appraiser visits. Receipts, contractor invoices, before-and-after photos, and any permits all strengthen the file. The appraiser can account for improvements they observe, but having records makes sure nothing gets missed.

What Happens After You Submit

The review usually takes 30 to 60 days while the servicer coordinates the appraisal and reviews your payment history. Keep making the full mortgage payment, PMI premium included, the whole time.

You’ll get a written decision. If the servicer approves, it must stop collecting PMI no later than 30 days after the later of the date it received your written request or the date you satisfied all remaining requirements, such as the appraisal. Any unearned premiums you’ve already paid must be refunded within 45 days of cancellation.⁶

If the servicer denies the request, it must explain why in writing.⁶ The usual reasons are a late payment on record, an unresolved subordinate lien, or an appraised value that came in short.

If You’re Denied

A denial isn’t the end of the road. Read the written explanation first, then work on whichever obstacle the servicer flagged.

Appraised value too low: ask the servicer whether you can order a second appraisal. Some servicers will allow it if you can point to errors or omissions in the first report, like a missed comparable sale or an improvement that wasn’t counted.
Late payment on your record: wait until the late falls outside the lookback window (12 months for a 30-day late, 24 months for a 60-day late) and reapply.
Subordinate lien: paying off a HELOC or second mortgage and getting the lien released can clear this.

If you’ve met every requirement and the servicer still refuses, you can file a complaint with the Consumer Financial Protection Bureau online or by phone at (855) 411-2372.⁷ The CFPB forwards complaints to the servicer and tracks the response.

When These Rules Don’t Apply

The appreciation-based process covers borrower-paid private mortgage insurance on conventional loans. Three common situations fall outside it, so appreciation won’t help the way it does above.

FHA loans. FHA mortgage insurance (MIP) runs on its own rules. For FHA loans with a case number assigned on or after June 3, 2013, MIP cannot be canceled early if the down payment was less than 10%; it stays for the life of the loan.⁸ With 10% or more down, MIP drops off after 11 years. A rise in home value doesn’t trigger early removal in either case. Refinancing into a conventional loan with enough equity is the main way out.

VA loans. VA-backed loans don’t carry monthly mortgage insurance. Most borrowers pay a one-time funding fee at closing, and there’s nothing ongoing to cancel.⁹

Lender-paid PMI. Some lenders pay the mortgage insurance upfront in exchange for charging you a higher interest rate. Lender-paid PMI (LPMI) cannot be canceled; it’s baked into the rate until you refinance, pay off, or sell.¹⁰ If your loan documents describe your mortgage insurance as lender-paid, the process in this article does not apply.

Refinancing as a Backup Plan

If you can’t meet seasoning, your loan type blocks cancellation, or the appraisal falls just short, refinancing into a new conventional loan can be a faster way to drop the insurance. The new loan is written against the home’s current appraised value; if that gives you 20% equity, the new loan won’t require PMI at all.

Refinancing tends to make the most sense when:

You have an FHA loan and the home has appreciated significantly, since refinancing to a conventional loan is the only exit from FHA MIP for most borrowers.
You have lender-paid PMI, so a new loan at a lower rate with no mortgage insurance may cut your total monthly cost.
Your loan is less than two years old, you have no qualifying improvements, but the home has gained real value.

A refinance brings its own costs: closing fees, a new appraisal, and possibly a different interest rate. Weigh the total cost against the PMI payments you’d keep making while waiting to qualify for cancellation. The savings from dropping PMI and perhaps a lower rate often cover the closing costs inside a year or two.

1
Consumer Financial Protection Bureau. What Is Private Mortgage Insurance
2
Fannie Mae. Termination of Conventional Mortgage Insurance
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Consumer Financial Protection Bureau. When Can I Remove Private Mortgage Insurance PMI From My Loan
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Consumer Financial Protection Bureau. Homeowners Protection Act PMI Cancellation Act Procedures
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Office of the Law Revision Counsel. 12 USC 4902 Termination of Private Mortgage Insurance
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Federal Reserve. Homeowners Protection Act Compliance Handbook
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Consumer Financial Protection Bureau. Submit a Complaint
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U.S. Department of Housing and Urban Development. Single Family Mortgage Insurance Premiums
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VA News. Home Loan Borrowers Can Now Deduct Funding Fees
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National Credit Union Administration. Homeowners Protection Act PMI Cancellation Act