How to Remove PMI From a Conventional Mortgage

Direct answer: You can generally ask your mortgage servicer to cancel borrower-paid PMI when your conventional loan is scheduled to reach 80% of the home's original value—or reaches 80% sooner through extra principal payments. PMI generally ends automatically at the scheduled 78% point if the loan is current. Earlier current-value cancellation may be possible under separate investor rules.

First, confirm what kind of mortgage insurance you have

Private mortgage insurance, or PMI, commonly applies to conventional mortgages when the loan-to-value ratio is above a program threshold. It protects the lender or loan investor against part of the loss if the borrower defaults; it is not homeowners insurance and does not protect the borrower from missed payments or property damage.

This guide focuses on borrower-paid mortgage insurance on conventional loans. FHA loans use mortgage insurance premiums under different rules, VA loans do not use monthly mortgage insurance, and lender-paid mortgage insurance works differently. Your closing disclosure, monthly statement, PMI disclosure, or servicer can help identify what you have.

The three main PMI exit paths

What “original value” means

For a home purchase, the Consumer Financial Protection Bureau says original value generally means the lower of the contract price or the appraised value at the time of purchase. After a refinance, it generally means the appraised value used for that refinance.

That definition matters because a higher estimate today does not change the original-value calculation. Suppose a home was purchased for $400,000 and appraised for $410,000. The original value for this purpose is generally $400,000. An 80% balance is $320,000, and a 78% balance is $312,000. The request and automatic-termination dates are not interchangeable: one requires borrower action and qualification, while the other is tied to the scheduled balance and current payment status.

Requirements for a borrower-requested cancellation

Under the federal framework summarized by the CFPB, a servicer must generally grant a qualifying request when the borrower:

• Submits the request in writing.
• Has a good payment history and is current.
• Certifies that the home has no junior lien, such as a second mortgage.
• Provides evidence, if requested, that the property's value has not fallen below its original value.

Fannie Mae's servicing rules give one example of how an investor implements those standards. For an eligible one-unit principal residence or second home, its original-value path uses an 80% threshold and requires the loan to be current, with no payment 30 or more days late in the prior 12 months and no payment 60 or more days late in the prior 24 months. Property type, investor, insurer, state law, loan age, and loan history can change the exact review, so start with the company collecting your payment.

Why paying down to 78% early does not necessarily trigger automatic termination

Automatic termination is generally tied to the date the balance is scheduled to reach 78% of original value—not simply the day extra payments cause the actual balance to cross 78%. If principal curtailments move you ahead of schedule, use the borrower-requested 80% path instead of waiting for the automatic date.

The midpoint rule is a separate backstop. If PMI has not otherwise ended, a covered loan generally must terminate PMI the month after it reaches the midpoint of its original amortization schedule, provided payments are current. On a 30-year mortgage that is usually after 15 years, though the rule is especially relevant to loans with interest-only periods, balloon features, or principal forbearance.

Can appreciation or renovations remove PMI sooner?

Possibly, but this is not the same as the federal original-value path. Current-value cancellation is governed by the investor, mortgage insurer, and servicer requirements for your loan. Do not order an appraisal independently before asking your servicer; it may not accept that report.

As one current example, Fannie Mae's servicing guide uses these borrower-requested current-value thresholds for an eligible one-unit principal residence or second home:

• Loan age between two and five years: current-value LTV of 75% or less.
• Loan age greater than five years: current-value LTV of 80% or less.
• Substantial borrower improvements: the two-year seasoning requirement may be waived at 80% LTV when qualifying improvements increased value.

Fannie Mae distinguishes value-adding improvements—such as a meaningful kitchen or bathroom renovation or added square footage—from ordinary repairs that merely keep the property functional. Its process also requires an acceptable payment record and a valuation ordered through the servicer's approved process. Freddie Mac and other investors have their own requirements, so these Fannie Mae thresholds should not be assumed for every conventional mortgage.

A practical call script for your servicer

Before you spend money on a valuation, call the number on your mortgage statement and ask:

1. Do I have borrower-paid PMI, lender-paid MI, or another mortgage-insurance structure?
2. Who owns or backs my loan, and which PMI cancellation rules apply?
3. What is my original value and scheduled 80% cancellation date?
4. What is my scheduled 78% automatic-termination date?
5. Am I eligible to request cancellation based on current value?
6. What loan-age, LTV, payment-history, and property requirements apply?
7. Must the servicer order the valuation, and what will it cost?
8. How should I submit the request, and when will I receive a decision?

Keep copies of the written request, valuation receipt, servicer response, and any PMI termination notice. If a request is denied, ask for the reason in writing and what would need to change before a new review.

Should you make a lump-sum principal payment just to remove PMI?

A principal payment may help you reach the original-value threshold sooner, but the best use of cash depends on the rest of your plan. Compare the one-time payment with the monthly PMI savings, emergency reserves, higher-interest debt, near-term repairs, and how long you expect to keep the mortgage. Also confirm the servicer's cancellation conditions before sending the money; crossing an LTV threshold does not cure an ineligible payment history or satisfy an uncompleted valuation requirement.

If you are still choosing a mortgage, compare the cost of PMI against the cash needed for a larger down payment. Keeping reserves and buying sooner can be more valuable than avoiding every dollar of mortgage insurance. Dan's conventional loan guide, cash-to-close guide, homebuying budget guide, and Path 2 Buy process can help organize that comparison.

Primary sources

• Consumer Financial Protection Bureau: When can I remove private mortgage insurance?
• Fannie Mae Servicing Guide: Termination of conventional mortgage insurance
• Freddie Mac Single-Family Seller/Servicer Guide: Cancellation of borrower-paid mortgage insurance
• National Credit Union Administration: Homeowners Protection Act compliance guidance

This article is educational and is not an approval, rate quote, commitment to lend, mortgage-servicing decision, or individualized legal, tax, credit, or financial advice. Federal and state law, investor, insurer, servicer, loan, property, occupancy, valuation, payment-history, and documentation requirements apply and can change. Contact your mortgage servicer for the rules and decision on an existing loan. All new loans are subject to approval. Equal Housing Lender.