When Can a Homeowner Request PMI to Be Cancelled?

A homeowner can request PMI cancellation once the mortgage’s principal balance reaches 80 percent of the home’s original value, as long as payments are current, recent payment history is clean, no other liens sit on the property, and the home’s value hasn’t dropped below what it was worth at closing. The request has to be in writing, and the servicer has 30 days to respond once it has everything it needs. That’s the short answer to when you can ask your lender to cancel private mortgage insurance; the details below determine whether the request actually succeeds.

The 80 Percent Threshold and What “Original Value” Means

Under the Homeowners Protection Act, the earliest point at which you can request cancellation is when your loan balance hits 80 percent of the property’s original value. Original value is a defined term: it’s the lesser of the purchase price on the sales contract or the appraised value the lender used at closing.¹ For a refinance, original value is the appraised value the lender relied on to approve the new loan.

On a $300,000 home purchase with a $285,000 mortgage, the 80 percent mark sits at $240,000. That’s the balance you need to reach before the servicer is obligated to consider your request.

There are two ways to get there. The balance can arrive at 80 percent on schedule according to the original amortization, or you can accelerate the timeline by making extra principal payments.² Either route triggers the right to request cancellation. Your lender is required to give you a written amortization schedule at closing showing when your balance is first scheduled to hit 80 percent, so the on-schedule date has been available since day one.³

If you’ve been paying extra, this is where the money is. The servicer’s automatic termination duty doesn’t kick in until 78 percent, and it uses the scheduled balance, not your actual one. So a borrower who has already paid the real balance below 78 percent through extra principal still has to affirmatively ask for cancellation to stop the premiums early.

The Payment History Requirement

Hitting the equity number isn’t enough on its own. The statute requires a “good payment history,” measured across two separate windows.¹

In the 12 months before your request, no mortgage payment was 30 or more days late.
In the 12 months before that (months 13 through 24), no mortgage payment was 60 or more days late.

The recent year is the stricter standard. One 30-day late in the past year disqualifies you, even if everything else is spotless. One 60-day late in months 13 through 24 does the same. The servicer verifies this against its own records, so there’s nothing to dispute in the paperwork you send.

Property Requirements: No Extra Liens, No Lost Value

You also have to certify that no subordinate liens sit on the property. That rules out cancellation if you have a second mortgage, a home equity line of credit, or any other debt secured by the home behind the primary mortgage.⁴

The servicer can require evidence that the home’s value hasn’t fallen below its original value.⁵ In practice that means a new appraisal, and the servicer controls the appraiser list. A report from an appraiser who isn’t on that list will usually be rejected, so ask for the approved list before you commission any valuation. You pay for the appraisal regardless of the outcome, and if your local market has softened, that report can end the request on its own.

The Alternative Path When Your Home Has Appreciated

The rules above measure equity against the home’s original value. If the property has gained value significantly, you may qualify sooner based on current market value, even without paying the balance down to 80 percent of the purchase price. This path runs on investor guidelines rather than the HPA. For loans owned by Fannie Mae on a one-unit primary residence or second home, the required loan-to-value ratio depends on how long you’ve held the mortgage:⁶

Two to five years of ownership: current LTV of 75 percent or less based on a new valuation.
More than five years: current LTV of 80 percent or less.
Under two years: current LTV of 80 percent or less, and you have to document that improvements you made increased the home’s value. Routine maintenance doesn’t qualify.

Investment properties and two-to-four-unit homes face a tighter 70 percent LTV with at least two years of seasoning.⁶ These current-value cancellations still require good payment history, no subordinate liens, and a valuation the servicer orders.

How to Submit the Request

The statute requires the request in writing, so a phone call to customer service doesn’t start the clock.⁴ Before drafting anything, pull your most recent statement and confirm the current principal balance against the 80 percent figure.

Find the correct contact. Look for the PMI or escrow department on your servicer’s website or monthly statement. Some servicers take requests through a secure portal; others want a letter to a specific address.
Write it plainly. Include your name, property address, loan account number, and a clear statement that your balance has reached 80 percent of the home’s original value and you are requesting cancellation of PMI.
Send it with proof of delivery. Certified mail with return receipt gives you a dated paper trail if the servicer later says they never received it.

If the servicer requires an appraisal, they’ll notify you after receiving the letter. Coordinate directly with an appraiser on the approved list and make sure the report goes to the servicer. Stay on top of scheduling rather than waiting for the servicer to chase it.

What the Servicer Has to Do Next

If the servicer denies your request, it has to send you a written explanation of the reasons within 30 days of receiving the request, or within 30 days after you’ve provided any evidence it required (the appraisal, typically), whichever is later. The notice has to include the results of any valuation used to make the decision.⁷

If the request is approved, the servicer has to stop collecting PMI premiums no more than 30 days after the later of the date it received the request or the date all eligibility criteria were met.⁶ Your next statement should show the lower monthly payment. If the servicer collected any premiums after your obligation to pay PMI ended, it has to return those unearned premiums within 45 days of cancellation.⁷

If You Never Ask

Doing nothing doesn’t leave PMI in place forever, but it does cost money. The servicer must automatically terminate PMI on the date the balance is first scheduled to reach 78 percent of original value under the initial amortization, assuming you’re current on payments.⁴ And a backstop terminates PMI at the midpoint of the loan’s amortization period regardless of balance. For a 30-year loan, that’s year 15. If you have equity now and qualify to request cancellation, waiting for either of those dates means paying premiums you don’t have to.

Loans These Rules Don’t Cover

The HPA governs borrower-paid private mortgage insurance on conventional loans. Several common products fall outside it.

FHA Loans

FHA loans carry their own mortgage insurance premiums, and the HPA’s cancellation rules don’t apply.⁵ For FHA loans with case numbers assigned on or after June 3, 2013, a down payment of 10 percent or more means the annual premium drops off after 11 years. A down payment below 10 percent means the premium lasts the full life of the loan.⁸ Refinancing into a conventional loan once you have enough equity is usually the only way out early.

VA Loans

VA-guaranteed loans don’t carry monthly mortgage insurance. They charge an upfront funding fee instead, so there’s nothing to cancel.⁵

Lender-Paid PMI

If your lender agreed to pay the mortgage insurance in exchange for a higher interest rate, that arrangement is explicitly excluded from the HPA’s cancellation and termination provisions.⁹ You can’t request cancellation and there’s no automatic termination. Lender-paid PMI ends only when the loan is refinanced or paid off.

If the Servicer Denies or Ignores You

Start with the written denial. The servicer has to state specific grounds, and if an appraisal drove the decision, the results have to come with the notice. A payment-history denial is easy to check against your own records. A value-based denial is harder because the servicer picks the appraiser.

If the servicer doesn’t respond within the 30-day window or you believe the denial violates the HPA, you can file a complaint with the Consumer Financial Protection Bureau at consumerfinance.gov. The CFPB oversees compliance with the Act and will contact the servicer. Keep your written request, the certified mail receipt, and any correspondence; it makes the complaint substantially easier to work.

1
Office of the Law Revision Counsel. 12 USC 4901 – Definitions
2
Federal Reserve. Homeowners Protection Act – Compliance Handbook
3
Office of the Law Revision Counsel. 12 USC 4903 – Disclosure Requirements
4
Office of the Law Revision Counsel. 12 USC 4902 – Termination of Private Mortgage Insurance
5
Consumer Financial Protection Bureau. When Can I Remove Private Mortgage Insurance (PMI) From My Loan?
6
Fannie Mae. Termination of Conventional Mortgage Insurance
7
CFPB Consumer Laws and Regulations. Homeowners Protection Act (PMI Cancellation Act) Procedures
8
U.S. Department of Housing and Urban Development. Mortgagee Letter 2023-05
9
Office of the Law Revision Counsel. 12 USC Ch. 49 – Homeowners Protection, 4905 – Disclosure Requirements for Lender Paid Mortgage Insurance