When Does PMI Go Away? The 78%, 80%, and Midpoint Rules

On a conventional mortgage, private mortgage insurance comes off automatically once your scheduled loan balance reaches 78% of the home’s original value, and you can ask your servicer to cancel it at 80%. Those thresholds come from the federal Homeowners Protection Act. The timing works differently for FHA loans and for lender-paid mortgage insurance, so the type of loan you have decides when the premium actually stops.

The 78% Automatic Termination

Your servicer is required to stop charging PMI on the date your loan balance is first scheduled to reach 78% of the home’s original value, based on the original amortization schedule.¹ Original value means whichever is lower: your purchase price, or the appraised value at closing.² You don’t have to ask. The charge is supposed to come off on its own.

One condition applies. You need to be current on your payments when that scheduled date arrives. If you’re behind, PMI doesn’t terminate until the first day of the month after you catch up.¹ Note that automatic termination looks at the original schedule, not your actual balance. Extra principal payments don’t move the automatic date, even if they’ve already pushed your real balance below 78%.

Requesting Cancellation at 80%

You can get there sooner by asking. Under the Homeowners Protection Act, you can submit a written request to cancel PMI once your balance reaches 80% of the home’s original value.² The 80% point can be measured either from the original amortization schedule or from your actual payments, which means extra principal counts here.³

To qualify, you need a good payment history, no subordinate liens on the property (such as a second mortgage or a HELOC), and in some cases evidence that the home’s value hasn’t dropped below its original value.² If you’ve been paying extra and watching the balance, this route can save you months of premiums over waiting for the automatic date.

Cancellation Based on Current Market Value

If your home has appreciated, your equity may be past 80% even when the loan balance hasn’t moved much. For loans owned by Fannie Mae, you can request PMI cancellation using the current appraised value, but the thresholds are tighter and depend on how long you’ve owned the home:

Two to five years of ownership: current balance must be 75% or less of the current appraised value.
More than five years of ownership: current balance must be 80% or less of the current appraised value.
If substantial improvements, such as added square footage or a kitchen or bath remodel, drove the value increase, the two-year waiting period can be waived and the required ratio is 80% or less.

Routine maintenance and minor repairs don’t count as substantial improvements.⁴ A full interior-and-exterior appraisal, ordered through your servicer, is typically required.

The Midpoint Backstop

PMI cannot run forever. Your servicer must stop charging it on the first day of the month after the midpoint of your loan’s amortization period, regardless of your current loan-to-value ratio.¹ On a 30-year loan, that’s the 15-year mark. This matters most for loans that were modified or that went through periods of negative amortization. You still have to be current on payments when the midpoint date arrives.

What Counts as a Good Payment History

Both automatic termination and borrower-initiated cancellation require a good payment history. The statute defines that as:

No payments 30 or more days late during the 12 months immediately before the cancellation or termination date.
No payments 60 or more days late during the 12-month period starting 24 months before that date.

In practice, roughly the last two years of your payment record are what the servicer looks at.² For a borrower-initiated request, the servicer will also confirm there are no subordinate liens and may ask for certification that the home’s value hasn’t fallen below the original value. If a new appraisal is involved, you’ll generally need to use an appraiser from the servicer’s approved panel.⁴

High-Risk Loans

If your mortgage was classified as high risk at closing, the standard thresholds shift. For non-conforming high-risk loans, automatic termination happens when the scheduled balance reaches 77% of the home’s original value rather than 78%.¹ Conforming high-risk loans follow extended schedules set by Fannie Mae and Freddie Mac. The midpoint backstop still applies in either case.

Loans the Cancellation Rules Don’t Reach

The Homeowners Protection Act covers conventional mortgages on single-family principal residences.³ Second homes and investment properties aren’t covered. The investor behind your loan may allow removal under its own rules, but federal law doesn’t require it.

Lender-Paid Mortgage Insurance

With lender-paid mortgage insurance (LPMI), the premium is built into your interest rate rather than billed separately. LPMI can’t be canceled by the borrower and isn’t subject to the automatic termination provisions of the Homeowners Protection Act.⁵ The only way to get rid of the cost is to refinance or pay off the loan. Your servicer is required to notify you after the date automatic termination would have applied to borrower-paid PMI, letting you know refinancing could eliminate the charge.

FHA Loans

FHA mortgage insurance premiums (MIP) follow their own rules. For FHA loans with case numbers assigned on or after June 3, 2013, the duration of annual MIP depends on your original down payment:

Down payment of 10% or more (LTV at or below 90%): annual MIP lasts 11 years, then ends automatically.
Down payment of less than 10% (LTV above 90%): annual MIP lasts the life of the loan.

There is no equivalent of the 80% written request for FHA MIP.⁶ If you have life-of-loan MIP and want it gone, refinancing into a conventional mortgage once you have at least 20% equity is typically the only route.

VA Loans

VA-backed loans don’t carry monthly mortgage insurance at all. Most VA borrowers pay a one-time funding fee at closing instead.⁷ There’s nothing to cancel.

How to Submit the Cancellation Request

Start with your most recent mortgage statement or online account to confirm your current principal balance. Compare it to 80% of the home’s original value, meaning the lower of your purchase price or the appraised value at closing. If your balance is at or below that figure and your payment history is clean, you can request cancellation.

Your written request should include the mortgage account number, the property address, and a clear statement asking for PMI cancellation based on the balance reaching 80% of the original value. Send it to your loan servicer, which is the company that collects your monthly payments, not necessarily the original lender. Certified mail with a return receipt creates a dated record. Many servicers also accept requests through their online portals.

If the servicer wants a new appraisal, which is common when you’re using current market value, you’ll arrange one through a provider the servicer approves. After the request and any supporting documents are in, expect a review period while the servicer verifies payment history, checks for subordinate liens, and confirms value.

After PMI Comes Off

Once PMI is canceled or terminated, the servicer cannot collect any further premiums more than 30 days after the later of receiving your request or the date you met all eligibility requirements. Unearned premiums already collected must be refunded within 45 days of the cancellation or termination date.¹

Your monthly payment should drop by the PMI amount. If the servicer runs an escrow account, the PMI portion that was being set aside will show as a surplus. Some servicers run a new escrow analysis right away and adjust the payment; others wait until the next annual escrow review.⁴ Check the next statement after the cancellation date to confirm the charge is gone, and contact your servicer if the adjustment hasn’t shown up within 30 days.

1
Office of the Law Revision Counsel. 12 USC 4902 – Termination of Private Mortgage Insurance
2
Office of the Law Revision Counsel. 12 USC 4901 – Definitions
3
Office of the Law Revision Counsel. 12 USC Chapter 49 – Homeowners Protection
4
Fannie Mae. Termination of Conventional Mortgage Insurance
5
Consumer Financial Protection Bureau. Homeowners Protection Act PMI Cancellation Act Procedures
6
U.S. Department of Housing and Urban Development. Mortgagee Letter 2013-04 – Revision to FHA MIP Duration
7
Veterans Affairs. VA Funding Fee and Loan Closing Costs