What PMI is, and why removal is worth tracking
If you bought a home with less than 20% down using a conventional loan, your lender almost certainly required private mortgage insurance (PMI). PMI doesn’t protect you — it reimburses the lender if you default. It typically costs 0.3% to 1.5% of your loan amount per year, added directly to your monthly payment. On a $360,000 loan, that’s roughly $90 to $450 every single month for coverage that exists purely for the bank’s benefit. The good news: federal law gives you a clear right to get rid of it well before the loan is paid off, and most homeowners never track the date closely enough to act as early as they could. If you haven’t worked out your monthly payment yet, the mortgage payment calculator is the place to start before coming back here to plan your PMI exit.
How PMI removal actually works
The Homeowners Protection Act of 1998 (HPA) governs PMI on conventional loans, and it sets two distinct thresholds — both measured against your original home value (the purchase price or appraised value when the loan closed, not today’s market value):
80% LTV — you can request it. Once your loan balance drops to 80% of the original value, you have the right to send your servicer a written request to cancel PMI. Nothing happens automatically here — if you don’t ask, you keep paying.
78% LTV — it must end automatically. Once your balance drops to 78% of the original value, the lender is legally required to terminate PMI on its own, provided your payments are current. This is the "if you do absolutely nothing" date.
The HPA adds one more backstop: PMI must also terminate at the midpoint of your amortization schedule (month 180 of a 360-month loan) regardless of LTV, in case a loan is amortizing unusually slowly. In practice, the 78% date arrives first for most standard loans, but the calculator above checks both and shows you which one is actually binding for your numbers.
Extra payments only move one of these dates. Because 80% eligibility can be based on either the schedule or your actual payments, paying extra principal pulls that request date forward. But both the 78% automatic date and the midpoint backstop are fixed to your original amortization schedule "irrespective of the outstanding balance" — no amount of extra principal moves them. So if you're paying extra, the gap between your (earlier) request-eligible date and the lender's (unchanged) automatic date only grows — and so does the PMI you'd waste by waiting instead of asking.
Note: the HPA exempts certain "high-risk" loans from these cancellation and termination rules, and some states layer on additional homeowner protections beyond the federal minimum. Your servicer's exact terms may vary from the general rules described here — check your loan documents or ask your servicer directly.
A worked example
Take a $400,000 home bought with 10% down: a $360,000 loan at 6.5% for 30 years, with PMI of $150/month. The loan starts at 90% LTV. Running the numbers, the balance reaches 80% of the original value around month 95 (a little under 8 years in) — that’s the day you can mail in a cancellation request. If you don’t, the balance doesn’t reach 78% until month 109, about 14 months later. Those 14 extra months of a $150 premium add up to $2,100 paid for coverage you were already entitled to drop — money that simply goes back to the lender if you wait instead of asking. That gap is the single biggest lever most homeowners overlook, and it only costs a phone call and a letter to close.
How to actually request cancellation
Reaching 80% LTV on paper doesn’t remove PMI by itself — you have to act. In practice:
1. Confirm your balance against the original value. Use your latest statement and the purchase price (or appraised value) from closing, not today’s market value, unless you’re pursuing the appreciation path below.
2. Send a written request to your servicer. Most servicers have a specific PMI cancellation form or process — call and ask, since requirements vary.
3. Make sure your payment history is clean. Servicers generally require that you’ve been current on payments for the past 12 months (and not more than 30 days late in the past two years).
4. Confirm there’s no second lien. A HELOC or second mortgage on the property can disqualify you until it’s resolved.
5. Be ready for an appraisal. Some servicers require one to confirm the home hasn’t lost value, especially if you’re requesting early or using the appreciation-based path instead of the standard original-value calculation.
If your home has appreciated significantly, you can also ask your lender to remove PMI once your balance reaches 80% of the current value — enter a current estimated value in the calculator’s optional fields to see that date. Unlike the 80%/78% rules above, this path is entirely at the lender’s discretion, usually requires a fresh appraisal you pay for, and isn’t guaranteed by law the way the original-value dates are.
FHA loans play by different rules
Everything above applies to conventional loans with PMI. FHA loans use a separate mortgage insurance premium (MIP) with its own, stricter rules — if your down payment was under 10%, MIP typically lasts for the life of the loan and can’t be cancelled through an LTV milestone at all. The usual way off FHA MIP is refinancing into a conventional loan once you have enough equity. We’re building a dedicated FHA loan calculator to walk through MIP specifically — for now, if you’re exploring a refinance, the mortgage payment calculator can help you compare what a new conventional payment would look like.
Frequently asked questions
What is PMI, and why does removing it matter?
Private mortgage insurance (PMI) protects the lender — not you — if you default on a conventional loan with less than 20% down. It typically costs 0.3%–1.5% of your loan amount per year, billed as part of your monthly payment. Because it protects the lender, not the homeowner, removing it the moment you’re eligible puts that money back in your pocket every month for the rest of the loan.
What's the difference between the 80% and 78% PMI removal dates?
At 80% of the original home value, the Homeowners Protection Act (HPA) gives you the right to submit a written request to cancel PMI — the lender doesn’t do it automatically. At 78% of the original home value, the lender is legally required to terminate PMI automatically, as long as your payments are current. The gap between those two dates is pure waste if you don’t act: you’re paying premiums for coverage you’re already entitled to drop.
Does the amortization midpoint rule matter for most borrowers?
The HPA also requires automatic PMI termination at the midpoint of your loan’s amortization schedule (month 180 of a 360-month loan), regardless of LTV. For most standard 30-year loans with a typical down payment, the 78% LTV date arrives well before the midpoint, so it’s rarely the binding rule. It becomes relevant on shorter terms or loans with minimal PMI coverage to begin with — the calculator above checks both and tells you which one actually governs your loan.
How do I actually request PMI cancellation from my servicer?
Send your loan servicer a written request once you’ve reached 80% LTV based on your original purchase price or appraised value. You’ll generally need a good payment history, no second liens or subordinate financing on the home, and sometimes a current appraisal to confirm you haven’t lost value. Requirements vary by servicer, so call ahead and ask for their specific PMI cancellation procedure.
Can extra principal payments help me remove PMI sooner?
Only for the 80% request date — not the 78% automatic one. Because 80% eligibility can be based on your actual payment history, every extra dollar of principal pulls that date forward. But federal guidance is explicit that 78% automatic termination (and the amortization-midpoint backstop) is fixed to your original amortization schedule "irrespective of the outstanding balance" — paying extra doesn’t move it. That’s actually the point: the more extra you pay, the wider the gap between when you could request cancellation and when the lender would eventually do it on their own, and the more money you leave on the table by not requesting it yourself. Enter an extra monthly payment in the calculator’s "extra details" panel to see exactly how much that gap grows.
My home has appreciated — can I remove PMI early because of that?
Possibly, but it works differently from the standard HPA rules. If your current home value is meaningfully higher than what you paid, you may be able to ask your lender to remove PMI once your balance reaches 80% of the current value. Unlike the 80%/78% original-value rules, this path is entirely lender-discretionary: they’ll typically require a new appraisal (at your expense) and may impose a minimum seasoning period before they’ll consider it.
Is this the same as FHA mortgage insurance (MIP)?
No — this calculator covers PMI on conventional loans. FHA loans use a separate mortgage insurance premium (MIP) with its own rules, and in many cases MIP cannot be cancelled the same way: if your down payment was under 10%, FHA MIP typically lasts for the life of the loan and the usual path off it is refinancing into a conventional mortgage. We’re building a dedicated FHA loan calculator to cover MIP specifically.