How to Request PMI Removal From Your Mortgage

Private mortgage insurance (PMI) is an added monthly cost required on many conventional mortgages when a borrower puts down less than 20%. While PMI helps protect the lender—not the homeowner—it isn’t meant to last forever. Once you’ve built enough equity in your home, you may be able to remove PMI and lower your monthly mortgage payment.

Knowing when PMI can be removed, which rules apply to your loan, and how to formally request cancellation can save you hundreds—or even thousands—of dollars over the life of your mortgage. PMI removal isn’t always automatic, but homeowners who understand the process can often eliminate it sooner than expected.

How PMI removal works

Most homeowners can get rid of PMI in one of three ways, depending on their loan terms and equity position:

1. Request PMI cancellation at 80% loan-to-value (LTV): You can formally ask your mortgage servicer to remove PMI once your loan balance reaches 80% of the home’s original value, assuming you meet payment and eligibility requirements.
2. Automatic PMI termination at 78% LTV: Federal law requires lenders to automatically cancel PMI once your balance reaches 78% of the original value, as long as your loan is current.
3. Early PMI removal using a new appraisal: If your home’s value has increased, some lenders allow PMI removal earlier than scheduled by using a new appraisal to prove sufficient equity.

Each option follows specific rules under the Homeowners Protection Act (HPA) and your loan’s servicing guidelines. 

What is private mortgage insurance (PMI)?

Private mortgage insurance is a type of insurance policy required on many conventional loans when a borrower makes a down payment of less than 20%. The borrower pays the premium, but the coverage protects the lender, not the homeowner.

Key PMI characteristics:

• Required on most conventional loans with less than 20% down
• Paid by the borrower as a monthly premium, upfront fee, or both
• Protects the lender if the borrower defaults
• Does not reduce your loan balance or build equity
• Can be removed once certain equity thresholds are met

Because PMI doesn’t benefit the borrower directly, removing it when possible is often a priority for homeowners focused on lowering ongoing housing costs.

When and why PMI is added to your mortgage

Lenders require PMI when a loan is considered higher risk—typically due to a smaller down payment. The lower your upfront equity, the greater the lender’s potential loss if the loan goes into default.

PMI is commonly required when:

• Your down payment is less than 20%
• You take out a conventional mortgage
• Your loan-to-value (LTV) ratio starts above 80%

Example scenario:

• Home purchase price: $400,000
• Down payment: 5% ($20,000)
• Loan amount: $380,000
• Starting LTV: 95%

Because the lender is financing most of the purchase price, PMI is added to offset that risk until the borrower builds more equity.

Note: FHA loans follow different mortgage insurance rules, which are covered below.

PMI vs. FHA mortgage insurance (MIP)

PMI applies to conventional loans, while FHA loans use mortgage insurance premiums (MIP). Both protect the lender, but they follow different rules. PMI can usually be removed once a borrower reaches sufficient equity—often around 80%–78% loan-to-value (LTV)—while FHA MIP often lasts much longer. 

For many FHA loans, MIP remains in place for the life of the loan, unless the borrower made a larger down payment or refinances into a conventional loan later. Because of this, conventional borrowers generally have clearer and earlier paths to removing mortgage insurance than FHA borrowers.

The downsides of PMI and how it affects your mortgage

Private mortgage insurance affects both your monthly payment and how quickly you build usable equity in your home. While PMI can make homeownership possible with a smaller down payment, it also increases your housing costs until it’s removed. 

At a high level:

• PMI raises your monthly mortgage payment
• It does not reduce your loan balance
• It can delay meaningful equity gains until removed

Monthly payment impact: with PMI vs. without PMI

Even modest PMI premiums can add up to thousands of dollars over time, which is why many homeowners look for opportunities to remove it as soon as they’re eligible.

When PMI can be removed under federal law

For most conventional mortgages, PMI cancellation is governed by the Homeowners Protection Act (HPA). This federal law sets clear rules for when PMI must be canceled—either at the borrower’s request or automatically—once certain loan-to-value (LTV) thresholds or time-based milestones are reached.

PMI can end in one of the following ways, depending on your loan balance, payment history, and loan age:

• At 80% LTV: Borrower-requested PMI cancellation (if eligibility requirements are met)
• At 78% LTV: Mandatory automatic PMI termination (if the loan is current)
• At the midpoint of the loan term: Final PMI termination, even if LTV hasn’t reached 78%

Think of PMI removal as a timeline that moves forward as you pay down your loan and stay current on payments—with earlier action possible if you proactively request cancellation.

Borrower-requested PMI cancellation at 80% LTV

Federal law allows homeowners to request PMI removal once their principal balance reaches 80% of the home’s original value. This is often the earliest opportunity to get rid of PMI without refinancing.

Mini-process for requesting PMI at 80% LTV:

1. Confirm your current loan balance and original home value
2. Verify that your scheduled payments have reached 80% LTV
3. Submit a written PMI cancellation request to your mortgage servicer
4. Provide any required documentation or appraisal, if requested
5. Receive written confirmation once PMI is removed

Typical eligibility requirements include:

• A good payment history (generally no recent late payments)
• The loan is current at the time of request
• No junior liens (such as a second mortgage or HELOC)
• Proof that the property value has not declined, if required by the servicer

Lenders are allowed to require additional verification before approving borrower-requested cancellation.

Automatic PMI termination at 78% LTV

If you don’t request PMI removal at 80% LTV, federal law requires lenders to automatically cancel PMI once your loan balance reaches 78% of the home’s original value, as long as your loan is current.

Example calculation:

• Original home value: $400,000
• 78% LTV threshold: $312,000

PMI must be automatically removed once the principal balance reaches $312,000, assuming the loan is in good standing

This automatic termination is based on the original amortization schedule, not extra payments or current market value.

Final PMI termination at the midpoint of the loan term

Federal law includes a final safety net for PMI removal: PMI must be terminated at the midpoint of the loan’s amortization schedule, even if the loan balance hasn’t reached 78% LTV.

How this works in practice:

• On a 30-year mortgage, the midpoint occurs after 15 years
• On a 15-year mortgage, the midpoint occurs after 7.5 years

Conditions for midpoint termination:

• The loan must be current
• PMI termination is based on the original loan schedule
• Applies even if home values decline or equity builds slowly

This rule ensures PMI does not last indefinitely for borrowers who consistently make their payments.

Special PMI rules for Fannie Mae and Freddie Mac loans

If your mortgage is backed by Fannie Mae or Freddie Mac, you may be eligible for earlier PMI cancellation under certain investor-specific guidelines.

Common investor requirements may include:

• Minimum seasoning periods (such as 2–5 years)
• Higher equity thresholds for early removal using a new appraisal
• Strong payment history with no recent delinquencies
• Documentation showing the property value has not declined

Because these rules vary by investor and servicer, homeowners should review their PMI disclosure and loan documents or contact their servicer to confirm the exact criteria that apply to their loan.

How to calculate your LTV and equity for PMI removal

Before requesting PMI removal, you’ll need to confirm whether you’ve reached the required loan-to-value (LTV) threshold. LTV compares how much you still owe on your mortgage to the value of your home and is the primary metric lenders use to determine PMI eligibility.

The LTV formula:

Loan-to-value (LTV) = Current loan balance ÷ Home value × 100

You can calculate your LTV using either your home’s original value or a current appraised value, depending on your lender’s rules and how you’re attempting to remove PMI.

Worked example: calculating LTV

• Original home value: $400,000
• Current loan balance: $320,000

LTV = $320,000 ÷ $400,000 × 100 = 80%

In this scenario, the borrower has reached the 80% LTV threshold, meaning they may be eligible to request PMI cancellation—assuming other requirements are met.

How your LTV changes as you pay down your loan

As your principal balance decreases, your LTV improves—even if your home’s value stays the same.

Using your original home value vs. current appraised value

Which home value lenders use depends on how you’re requesting PMI removal and when in the loan term you apply.

Original home value is typically used when:

• Requesting PMI removal under federal 80% or 78% rules
• Calculating automatic PMI termination
• Following the original amortization schedule
• No new appraisal is submitted

A new appraised value may be used when:

• Requesting early PMI removal based on appreciation
• Your lender allows appraisal-based cancellation
• Minimum seasoning requirements are met (often 2–5 years)
• The appraisal confirms sufficient equity

Most lenders default to the original purchase price or appraised value at closing unless you specifically request an appraisal-based review.

How home price increases or decreases affect PMI timing

Changes in your home’s value can either accelerate or delay PMI removal, depending on market conditions and lender policies.

Scenario 1: Home value increases

• Purchase price: $400,000
• Current appraised value: $460,000
• Loan balance: $345,000

LTV = $345,000 ÷ $460,000 ≈ 75%

If your lender allows appraisal-based removal, this level of appreciation could qualify you for early PMI cancellation, even if your scheduled balance hasn’t reached 80% of the original value.

Scenario 2: Home value decreases

• Purchase price: $400,000
• Current appraised value: $370,000
• Loan balance: $330,000

LTV = $330,000 ÷ $370,000 ≈ 89%

In this case, a lower appraised value could delay PMI removal or prevent approval for early cancellation, even if your scheduled balance suggests you’re close.

Because appraisal-based PMI removal involves cost and risk, it’s important to run the numbers carefully before requesting one.

Step-by-step: how to request PMI removal

Once you believe you’ve reached the required equity threshold, removing PMI is largely an administrative process. Lenders won’t cancel it automatically at 80% LTV—you must request it and meet their conditions. Following a clear, documented process helps avoid delays or denials.

Step 1: confirm you meet your servicer’s PMI requirements

Start by reviewing your PMI disclosure and loan documents. These outline the earliest date you can request cancellation and any servicer-specific conditions beyond federal minimums.

Documents to locate:

• Closing disclosure or loan estimate
• PMI disclosure or mortgage insurance rider
• Most recent mortgage statement
• Original appraisal or purchase contract

Key questions to answer before requesting PMI removal:

• What LTV threshold does my servicer require (80% or lower)?
• Is a written request required?
• Does my servicer require a new appraisal?
• Are there seasoning or occupancy requirements?
• Are there investor-specific rules tied to my loan?

If you can’t find this information, your mortgage servicer can provide it upon request.

Step 2: check your payment history and loan status

A strong payment record is a core requirement for PMI removal approval. Even if your LTV qualifies, payment issues can delay or block cancellation.

What usually counts as a “good payment history”:

• No 30-day late payments in the past 12 months
• No 60-day late payments in the past 24 months
• Loan is current at the time of the request

Common disqualifiers include:

• Recent late or missed payments
• Loan in forbearance or loss mitigation
• Past-due balances or unresolved fees

If you’ve had recent payment issues, waiting a few billing cycles may improve your chances.

Step 3: Verify there are no junior liens on your property

Most servicers require confirmation that no junior liens exist before approving PMI cancellation. Additional liens increase lender risk and can override equity gains.

Common types of junior liens:

• Second mortgages
• Home equity loans
• HELOCs (home equity lines of credit)
• Local tax or assessment liens

You can confirm lien status by reviewing your loan documents, checking county property records, or contacting your servicer directly.

Step 4: decide whether you need a new appraisal

A new appraisal isn’t always required—but it can be useful if your home’s value has increased significantly since purchase.

When an appraisal may make sense:

• Your home has appreciated due to market growth or improvements
• You’re seeking early PMI removal before scheduled amortization
• Your servicer allows appraisal-based cancellation

Pros of getting an appraisal:

• May qualify you for PMI removal sooner
• Reflects current market value
• Can reduce LTV faster than waiting

Cons to consider:

• Appraisal costs are typically paid by the borrower
• No guarantee the value comes in high enough
• A low appraisal can delay PMI removal

Rule of thumb: An appraisal is usually worth considering if you expect your home’s value to have increased enough to push your LTV well below 80%, not just barely.

Step 5: drafting and sending your PMI removal letter

Most servicers require a written request to begin PMI cancellation. This can often be mailed or uploaded through your online account.

Your PMI removal letter should include:

• Borrower name(s)
• Property address
• Loan number
• Current loan balance
• Statement requesting PMI cancellation
• Confirmation that eligibility requirements are met
• List of attached documentation

Simple PMI removal letter structure:

• Opening request for PMI cancellation
• Statement of LTV eligibility
• Acknowledgment of servicer conditions
• Contact information and signature

Sending the request via certified mail or a secure online portal helps create a paper trail.

Step 6: supporting documentation to include with your request

Including documentation upfront can reduce back-and-forth and speed up approval.

Common supporting documents:

• Recent appraisal (if required or requested)
• Proof of homeowners insurance
• Statement confirming no junior liens
• Payment history or mortgage statement
• Occupancy certification, if applicable

Your servicer will notify you if additional documentation is needed.

Step 7: following up and escalating if needed

PMI removal requests aren’t always processed quickly. Knowing when—and how—to follow up matters.

Typical response timeline:

• Initial acknowledgment: 1–2 weeks
• Review and appraisal (if required): 2–4 weeks
• Final decision and PMI removal: 1–2 billing cycles

If you don’t receive a response or believe your request was mishandled:

• Follow up with your servicer’s customer service or loan servicing team
• Request a supervisor or escalation review
• Submit a written complaint if federal PMI rules aren’t being followed
• Keep copies of all correspondence and documentation

Staying organized and persistent often makes the difference between a delayed request and a successful PMI cancellation.

Other ways to get rid of PMI faster

If waiting for your loan to naturally reach 80% or 78% LTV feels too slow, there are several strategies that can help you eliminate PMI sooner. The right option depends on your cash flow, interest rate, home value, and how long you plan to stay in the home.

Common PMI removal strategies compared

Making extra principal payments to reach 80% LTV

Paying extra toward your principal reduces your loan balance faster, helping you reach the 80% LTV threshold ahead of schedule.

How it works:

• Extra payments go directly toward principal
• Each payment lowers your balance and future interest
• PMI removal eligibility may arrive months—or years—earlier

Simple example:

• Loan balance: $340,000
• 80% LTV target: $320,000
• Gap to PMI removal: $20,000

If you apply an extra $500 per month toward principal, you could reach the threshold over three years sooner than scheduled, depending on your loan terms.

Tips for planning extra payments:

• Confirm payments are applied to principal
• Avoid prepayment penalties (rare, but worth checking)
• Combine extra payments with scheduled milestones (bonuses, tax refunds)

Refinancing to remove PMI

Refinancing replaces your existing mortgage with a new loan. If your equity has increased enough, the new loan may not require PMI at all.

Refinancing can remove PMI when:

• Your new LTV is 80% or lower
• Your credit and income still qualify
• Market interest rates are favorable

Pros of refinancing:

• Eliminates PMI entirely
• May lower your interest rate
• Can shorten or reset your loan term

Cons to consider:

• Closing costs can be significant
• A higher rate may offset PMI savings
• Resets your amortization schedule

Mini decision guide:

• Refinance makes sense if you can remove PMI and lower or maintain your interest rate
• It may not make sense if the rate increase outweighs PMI savings or if you plan to sell soon

Running a break-even analysis is essential before choosing this option.

Weighing the pros and cons of removing PMI

While removing PMI can lower your monthly payment, it isn’t always the best immediate financial move. The right choice depends on how much PMI you’re paying, what it costs to remove it, and how long you plan to stay in the home.

PMI removal: pros vs. cons

The goal is to make sure the savings justify the effort and cost.

Savings from dropping PMI versus upfront costs

To decide whether PMI removal makes sense, compare your monthly savings to any upfront costs, such as an appraisal or refinancing fees.

Example break-even calculation:

• Monthly PMI: $160
• Appraisal cost: $480

Break-even point:
$480 ÷ $160 = 3 months

In this example, removing PMI pays for itself quickly. After the break-even point, all savings go directly back into your budget.

How to estimate your own break-even:

• Identify your monthly PMI cost
• Add up any one-time removal costs
• Divide total cost by monthly PMI savings
• Compare the result to how long you expect to keep the loan

Short break-even periods typically favor immediate PMI removal.

When it may make sense to keep PMI temporarily

There are situations where paying PMI a bit longer may be reasonable—or even preferable.

PMI may be worth keeping if:

• You plan to sell or refinance in the near future
• Your PMI premium is very low
• Removal costs exceed near-term savings
• Cash is better used for higher-interest debt
• You’re prioritizing emergency savings or other goals

From an opportunity cost standpoint, tying up cash in an appraisal or refinance may not be ideal if that money could earn more elsewhere or provide greater financial stability.

In these cases, waiting for automatic PMI termination can be a low-effort alternative.

What to do if your lender refuses to remove PMI

Yes—a lender can deny a PMI removal request, but only if you don’t meet the eligibility requirements or specific conditions outlined in your loan documents and federal law. If your request is denied, the next step is understanding why and deciding whether the decision can be challenged.

How to respond to a PMI denial (step by step)

1. Request a written explanation for the denial
2. Verify your eligibility against federal rules and your PMI disclosure
3. Correct or supplement documentation, if applicable
4. Resubmit your request or escalate the issue if you believe the denial is incorrect

Staying organized and requesting clarity in writing makes it easier to resolve issues—or escalate if needed.

Common reasons PMI requests are denied

Most PMI denials fall into a few predictable categories. Understanding the reason helps you determine your next move.

Typical denial reasons and what to do next:

• LTV is above 80% → Double-check your loan balance and valuation method
• Recent late payments → Wait until your payment history meets servicer requirements
• Loan is not current → Bring the account fully up to date before reapplying
• Junior lien exists → Pay off or subordinate the lien if possible
• Property value declined → Avoid appraisal-based requests until values recover
• Seasoning requirements not met → Confirm minimum loan age rules

A denial doesn’t always mean “never”—it often means “not yet.”

How to challenge a decision or file a complaint

If you believe your servicer denied PMI removal incorrectly, you have the right to challenge the decision.

Steps to dispute a PMI denial:

1. Request detailed denial reasons in writing
2. Compare the decision to your PMI disclosure and federal guidelines
3. Submit additional documentation if needed (updated balance, appraisal, payment history)
4. Escalate the issue to a servicing supervisor or compliance department

If the issue remains unresolved, you can seek help from:

• Your mortgage servicer’s escalation or compliance team
• A federal consumer financial protection agency
• State-level banking or financial regulators
• Housing counseling organizations approved by the government

Keep copies of all correspondence, statements, and submissions. Documentation strengthens your position if formal review becomes necessary.