You may be able to remove private mortgage insurance (PMI) without refinancing and keep your existing interest rate. Ask your mortgage servicer about cancellation before paying for a new loan or an appraisal.
The rules below focus on borrower-paid PMI on conventional mortgages for single-family primary homes. FHA mortgage insurance and lender-paid insurance follow different rules. Older mortgages and loans classified as high risk can also have different requirements; check your loan's PMI disclosure.
Request PMI cancellation at 80% of original value
For covered loans, you can request cancellation when your principal balance is scheduled to reach 80% of the home's original value, or earlier if extra principal payments reach that threshold. Send a written request, stay current, and meet the payment-history requirements. The servicer can require evidence of no junior liens and that the home's value has not fallen.
Original value generally means the lower of the purchase price or original appraisal. For a refinanced loan, use the appraisal from that refinance. These requirements come from the CFPB's PMI cancellation guidance.
For example, if your original value was $300,000, the 80% threshold is $240,000. With a $246,000 balance, a $6,000 principal payment would reach it. Ask the servicer to confirm eligibility before using that cash: a principal payment reduces debt but also leaves you with less available savings.
Wait for automatic termination at the scheduled 78% date
For eligible loans, PMI generally ends when the balance is scheduled to reach 78% of original value, provided payments are current. Extra payments do not move that scheduled date forward; use the cancellation request above instead.
There is also a midpoint backstop: PMI ends the month after the amortization schedule's midpoint if you are current, even if the balance has not reached 78%. See Fannie Mae's automatic-termination rules for its loans and property-specific requirements.
On a $300,000 original value, 78% is $234,000. Ask for the scheduled termination date rather than estimating it from today's home value.
Use increased home value, if your loan allows it
A higher valuation can support a separate cancellation request under your loan investor's rules. Loan-to-value (LTV) is your loan balance divided by the property value used for the review. Twenty percent equity is not a universal approval threshold.
For a Fannie Mae loan on a one-unit primary home, its current-value route generally requires an LTV of 75% or less at two through five years, or 80% or less after five years. Qualifying substantial improvements can waive the two-year minimum, with an 80% limit. Payment-history and valuation requirements still apply. These are Fannie Mae rules, not a promise for every mortgage.
Ask your servicer which investor owns the loan, what valuation it accepts, and what it charges. Have it explain the process before you order an appraisal yourself.
Refinance only if the full comparison works
A conventional refinance generally requires PMI when equity is below 20%, according to the CFPB's explanation of PMI. Use the proposed new balance, including financed closing costs, when checking equity. A $240,000 loan against a $300,000 accepted value is 80% LTV; rolling in $6,000 raises it to 82%.
Compare three choices: keep paying PMI until it ends, request cancellation on the existing loan, or refinance. Include closing costs, the new rate, remaining loan term, and how long you expect to keep the mortgage. Compare Loan Estimates before selecting an offer.
Example: PMI savings can end before refinance costs break even
Suppose PMI costs $100 a month and your servicer confirms it will end in 18 months. If the premium stays unchanged, keeping the loan would cost another $1,800 in PMI.
Now suppose a refinance eliminates PMI but costs $4,000 out of pocket. If principal-and-interest payments and the remaining term stay the same, it cannot recover those fees from PMI savings alone. Dividing $4,000 by $100 gives 40 months, but there are only 18 months of PMI left to avoid.
This is an illustrative comparison, not a rate quote. A different rate or term changes the result; compare interest and remaining balances as well as monthly payments.
Use the refinance calculator to explore loan payments and costs, but check PMI timing separately. The current calculator carries entered monthly PMI through the remaining term; it does not schedule future cancellation. It can therefore overstate refinance savings when existing PMI is due to end soon. Use your servicer's confirmed end date for that comparison.
FHA mortgage insurance does not follow the PMI thresholds
FHA loans use mortgage insurance premiums (MIP). For FHA case numbers assigned on or after June 3, 2013, annual MIP generally lasts 11 years when original LTV is 90% or less, or the loan term when it is above 90%. Earlier cases have different rules. See HUD's MIP duration table.
Reaching 20% equity does not itself end those FHA premiums. Refinancing into a conventional loan may replace them, but compare the new loan's PMI, rate, and costs before deciding.
What to ask your servicer
Request the original value used for cancellation, your current principal balance, the earliest cancellation-request date, and the scheduled automatic-termination date. Ask whether a current-value review is available and what conditions or fees apply. Keep the response and any cancellation confirmation with your mortgage records.
