You can cancel private mortgage insurance on a conventional loan once your principal balance is scheduled to hit 80 percent of the home’s original value, and your servicer has to drop it automatically at 78 percent as long as you’re current on payments. Those two thresholds, set by the federal Homeowners Protection Act of 1998, are the core of private mortgage insurance cancellation for most single-family mortgages closed on or after July 29, 1999.1NCUA. Homeowners Protection Act (PMI Cancellation Act) The rules below explain how to use each path, what can disqualify you, and what to do if your servicer doesn’t follow through.
Requesting Cancellation at 80 Percent
You don’t have to wait for PMI to come off on its own. Under the Homeowners Protection Act, you can ask your servicer to cancel it once your loan’s principal balance reaches 80 percent of the home’s original value.2CFPB. When Can I Remove Private Mortgage Insurance From My Loan
The request has to be in writing. You also have to be current on your payments and have what the statute calls a “good payment history.” That phrase is defined precisely: no payment 60 or more days late during the 12-month period starting two years before the cancellation date, and no payment 30 or more days late during the 12 months immediately before it.3GovInfo. Homeowners Protection Act of 1998
Your servicer can also require you to certify that there are no junior liens on the property (a second mortgage or home equity line, for example) and to produce evidence, such as an appraisal, showing the home hasn’t dropped below its original value.2CFPB. When Can I Remove Private Mortgage Insurance From My Loan
The projected date you’ll first become eligible to make the request is usually printed on the PMI disclosure form you received at closing. You can also reach 80 percent faster by making extra principal payments.1NCUA. Homeowners Protection Act (PMI Cancellation Act)
What “Original Value” Means
Original value is the lesser of the purchase price or the appraised value at the time the loan closed. If you refinanced, it’s the appraised value at the time of the refinance. A rising market doesn’t by itself change this figure for HPA purposes, though Fannie Mae and Freddie Mac guidelines may offer additional paths to cancellation based on current property values or substantial home improvements, as long as those paths aren’t less favorable than the HPA.2CFPB. When Can I Remove Private Mortgage Insurance From My Loan
Automatic Termination at 78 Percent
Even if you never send a cancellation request, your servicer has to end PMI automatically on the date your balance is first scheduled to reach 78 percent of the original value, provided you’re current on payments. This cutoff is calculated purely from the amortization schedule. It doesn’t matter whether your property value has dropped or whether you’ve taken on a second lien.4Federal Reserve. Homeowners Protection Act Examination Manual There’s also no “good payment history” test here; you just need to be current.5FDIC. Homeowners Protection Act
If you aren’t current on the scheduled termination date, the servicer has to terminate PMI on the first day of the month after you catch up. Once termination happens, no further premiums can be collected beyond 30 days after that date.5FDIC. Homeowners Protection Act
High-Risk Loans Follow a Different Rule
Loans classified as “high-risk” at origination (by your lender, Fannie Mae, or Freddie Mac) are not subject to the standard 80 percent and 78 percent thresholds. Instead, PMI on these loans has to end by the first day of the month after the midpoint of the amortization period, assuming you’re current. For a 30-year mortgage, that’s 15 years in. If you’re not current at the midpoint, termination happens as soon as you catch up.5FDIC. Homeowners Protection Act
For lender-defined high-risk loans that aren’t under Fannie Mae or Freddie Mac guidelines, there’s an added trigger: PMI must also end when the scheduled balance reaches 77 percent of the original value.6Office of the Law Revision Counsel. 12 U.S.C. § 4902
What Should Happen After Cancellation
Within 30 days of cancellation or termination, your servicer has to send you a written notice confirming the insurance has ended and that no further premiums or fees are owed. If your cancellation request is denied, you’re entitled to a written explanation within 30 days, including the results of any appraisal used in the decision.1NCUA. Homeowners Protection Act (PMI Cancellation Act)
Any unearned premiums you’ve already paid must be refunded within 45 days of the cancellation or termination date.7Office of the Law Revision Counsel. Homeowners Protection Act of 1998 A refund parked in your escrow account instead of returned to you doesn’t satisfy that requirement; CFPB examiners have flagged that exact practice as a violation.8CFPB. Compliance Bulletin 2015-03
Your servicer is also required to send you an annual notice reminding you of your cancellation and termination rights, along with a mailing address and phone number for inquiries.1NCUA. Homeowners Protection Act (PMI Cancellation Act)
Lender-Paid PMI Can’t Be Canceled
One important boundary. If your mortgage insurance is lender-paid, meaning the lender pays the premium and recovers the cost through a higher interest rate, you cannot cancel it under the HPA. It ends only when the loan is refinanced, paid off, or otherwise terminated. You should have received a disclosure explaining this on or before the date of your loan commitment, including a cost-benefit comparison with borrower-paid PMI over a ten-year period.4Federal Reserve. Homeowners Protection Act Examination Manual
Within 30 days after what would have been the automatic termination date on a borrower-paid loan, the servicer must send a notice letting you know that refinancing may be an option for eliminating the embedded insurance cost.7Office of the Law Revision Counsel. Homeowners Protection Act of 1998
State Laws May Give You More
The HPA is a federal floor, not a ceiling. A state law isn’t preempted if it gives borrowers earlier cancellation or termination than the federal standard. Several states had PMI cancellation laws on the books before the federal act passed, including California, Connecticut, Hawaii, Maryland, Minnesota, and New York.9EveryCRSReport. Private Mortgage Insurance
New York, for example, can require cancellation at 75 percent of appraised value rather than the federal 78 percent of original value, and a 2001 opinion from the New York Department of Financial Services confirmed that the more borrower-favorable state rule controls.10New York DFS. OGC Opinion No. 01-02-02 California allows requests at 75 percent loan-to-value based on either the original sale price or current fair market value, subject to a two-year seasoning period and limits on recent delinquencies.11California Legislature. SB 270 Committee Analysis Check your state’s insurance or banking department if you want to know whether a stronger rule applies to you.
If Your Servicer Gets It Wrong
Servicers do get this wrong, and the law gives you a remedy. A borrower who discovers a violation can file suit within two years of discovery. In an individual action, you can recover actual damages with interest, statutory damages of up to $2,000, court costs, and reasonable attorney fees. Class actions carry caps: against a federally regulated entity, total statutory damages are capped at the lesser of $500,000 or one percent of the defendant’s net worth; against other entities, statutory damages are capped at $1,000 per class member, with total recovery not exceeding the lesser of $500,000 or one percent of the defendant’s gross revenues.3GovInfo. Homeowners Protection Act of 1998
Federal banking regulators can also act directly, ordering servicers to correct borrower accounts and refund improperly collected premiums.5FDIC. Homeowners Protection Act The Consumer Financial Protection Bureau gained supervisory authority over the HPA under the Dodd-Frank Act and has pursued servicers for the kinds of failures borrowers run into most: not terminating on time, collecting premiums past the 30-day cutoff, failing to return unearned premiums within 45 days, imposing extra-statutory “seasoning” requirements, and using investor guidelines (like a 75 percent threshold on original value) in place of the statutory 80 percent rule for borrower-requested cancellation.8CFPB. Compliance Bulletin 2015-03
In a 2024 consent order, the Bureau found that Fay Servicing had failed to terminate PMI on time, continued disbursing premiums from escrow accounts past the legal termination date, in some cases used post-modification property values instead of the statutory original value, and failed to return unearned premiums within 45 days. The order required Fay to refund affected borrowers and overhaul its termination process.12CFPB. Fay Servicing Consent Order If you believe your servicer missed the mark, keep your records, put your complaint in writing, and consider filing with the CFPB in addition to any private action.