This guide shows you how to remove PMI from your mortgage, which route fits your loan, what it saves each month, and how to submit a request your servicer cannot easily reject. Before you start, gather your latest mortgage statement, your original closing documents, and a rough idea of what your home is worth today.
By Duane Buziak, NMLS #1110647 (Coast2Coast Mortgage LLC, NMLS #376205)
Step 1: Confirm You Actually Pay Private Mortgage Insurance
Open your latest statement and your Closing Disclosure. Look for a line labeled “mortgage insurance” or “PMI.” If you see it as a separate monthly charge, you have borrower-paid PMI, which is what this guide covers. Your servicer is the company that collects your payment, and it may differ from the company that originated your loan.
Several charges look similar but follow different rules:
- FHA mortgage insurance premium (MIP): set by FHA rules, not the PMI cancellation rules in the steps below.
- USDA annual fee: a guarantee fee that does not cancel at 80% LTV.
- VA funding fee: a one-time charge, usually financed. VA loans carry no monthly PMI.
- PMI built into your rate: if you took a slightly higher rate instead of a monthly premium, there is no line item to cancel. The usual exit is a refinance.
Next, identify your loan type and who owns it. Conventional loans backed by Fannie Mae or Freddie Mac follow the Fannie Mae Servicing Guide or the Freddie Mac Guide, and your servicer applies them. If you are unsure who owns your loan, ask your servicer directly.
Mistake to avoid: assuming an FHA loan works like a conventional one. Under current HUD rules, most FHA loans with less than 10% down carry MIP for the life of the loan, so the realistic exit is usually a refinance. Verify the rule for your origination date at HUD.gov before you spend money on anything else.
Step 2: Know the Three Legal Removal Triggers and Find Your Date
Loan-to-value (LTV) is your loan balance divided by the home’s original value, meaning the lesser of the purchase price or the appraised value at closing. The Homeowners Protection Act of 1998 sets three triggers for conventional borrower-paid PMI, as the CFPB explains:
- Borrower-requested cancellation at 80% LTV. It is a request, not an automatic event. Many borrowers wait for PMI to vanish and keep paying.
- Automatic termination at 78% LTV on the original amortization schedule, if you are current on payments.
- Final termination at the midpoint of the amortization (the month after month 180 of a 30-year loan, so month 181), if you are current.
Request-based cancellation generally also requires a good payment history, no subordinate liens such as a HELOC, and sometimes evidence that the property has not declined in value. Confirm the specifics on your servicer’s own policy page.
Worked example. Suppose you bought a home for $400,000 with 5% down, so the loan is $380,000. At 80% LTV the balance is $320,000. At 78% it is $312,000. Assume a 6.5% fixed rate on a 30-year term, which gives principal and interest of about $2,402 a month. Running the amortization schedule, the balance reaches $320,000 around month 123 (just over ten years) and $312,000 around month 135. Treat these as approximations and check them with an amortization calculator using your actual rate and closing date. Your servicer can also tell you its scheduled dates.
Extra principal payments pull both dates earlier. Write down your own 80% balance, your 78% balance, and your month 181 date. You will use them in every step that follows.
Step 3: Build the Total Cost Worksheet to See What PMI Is Costing You
PMI is one line in a larger monthly cost, so measure it against the whole payment. Here is the worksheet for the same $400,000 home in Henrico County, Virginia, using these assumptions:
- Property tax: I used an illustrative $0.85 per $100 of assessed value on a $400,000 assessment, which is $3,400 a year. The rate changes, so confirm the current figure on the Henrico County real estate assessments page before relying on it. I have not independently verified the rate as of November 2026.
- Homeowners insurance: an estimate of $1,800 a year. Use your actual policy.
- PMI: PMI typically runs a fraction of a percent of the loan per year, depending on credit score and down payment. I assumed 0.50% of $380,000, or $1,900 a year. This is an illustration, not a quoted rate. Your statement shows your real charge.
| Line item | With PMI | After PMI | Difference |
|---|---|---|---|
| Principal and interest | $2,402 | $2,402 | $0 |
| Property tax ($0.85 per $100) | $283 | $283 | $0 |
| Homeowners insurance (estimate) | $150 | $150 | $0 |
| PMI (illustrative 0.50%) | $158 | $0 | -$158 |
| Total monthly | $2,993 | $2,835 | -$158 |
That is about $1,900 a year. Now compute break-even. If a servicer-ordered appraisal costs an illustrative $600, you recover it in under four months of PMI savings ($600 divided by $158). If you are weighing a refinance with, say, $6,000 in costs, PMI alone takes about 38 months to repay it, before counting any rate change. Run the same two divisions with your own numbers.
Step 4: Decide Whether to Use Your Original Value or a New Appraisal
You have two ways to prove you have reached 80% LTV.
Original-value route
No appraisal is needed. You simply reach the 80% balance on schedule. Extra principal payments move the date earlier. In the example, you need a $320,000 balance, which is $60,000 below the starting loan.
Current-value route
If your home has appreciated, you may get below 80% sooner. Servicers usually require their own appraisal or a broker price opinion (BPO) at your cost. Ask for the fee and the seasoning rules, since many servicers require a minimum time since closing, and this varies. Verify it with your servicer.
Comparison. Take the $380,000 balance and suppose the home now appraises at $450,000. LTV is $380,000 divided by $450,000, about 84%. To reach 80% of $450,000 ($360,000), you would need to pay down roughly $20,000. On the original-value route, the same balance would need to fall by $60,000. Appreciation can cut the required paydown by two thirds, but only if the servicer accepts it. In practice your balance will already be lower than $380,000 by the time you do this, so the real gap is smaller.
Major renovations may count toward value. Keep permits, contracts, and receipts, and include them with the request.
Mistake to avoid: paying for an appraisal before the servicer confirms in writing that it will accept one, who may order it, and which valuation product it requires.
Step 5: Send a Written PMI Cancellation Request
Call your servicer first and ask for its exact cancellation requirements, including the payment-history look-back period. Then send a written request by the method it specifies, and keep proof of delivery (certified mail receipt or portal confirmation).
Include:
- Your loan number and property address
- Current principal balance and the original value used
- Your LTV calculation
- A statement that you have had no late payments during the required look-back period
- Confirmation that there are no subordinate liens
- Any appraisal, BPO, or renovation documentation
A sentence structure that works: “I am requesting cancellation of private mortgage insurance on loan [number] under the Homeowners Protection Act. My current balance is [amount], which is [percent] of the original value of [amount], and my payments are current with no late payments in the past [period]. Please confirm the cancellation date in writing.”
If you are denied, ask for the reason in writing. Common causes are a recent late payment, a second lien such as a HELOC, or an appraisal that came in low. Each has a fix: wait out the look-back period, pay off or subordinate the lien, or dispute the valuation with comparable sales.
Follow-up: note the date you sent the request. If you hear nothing in a reasonable time, escalate to a servicer supervisor. If you believe the rules are being ignored, file a complaint through the CFPB complaint portal.
Step 6: Refinance to Remove PMI When Cancellation Is Not Available
A refinance makes sense when your FHA MIP will not drop off, your servicer will not cancel, or a rate drop makes a new loan worthwhile on its own. It is not always the cheapest route. Cancellation costs a few hundred dollars at most, while a refinance carries full closing costs.
To avoid PMI on the new loan, you need to be at or below 80% LTV on the new appraised value. With a $450,000 value, the maximum loan is $360,000. If your payoff is $380,000, you would need to bring about $20,000 to closing to avoid PMI. Cash-out refinances can go up to 90% under Duane Buziak’s program, which on $450,000 is $405,000. Above 80%, PMI or higher pricing may apply, so treat extra cash as a trade-off against the monthly savings.
Duane Buziak shops many lenders at once as your broker and uses the NoTouch Credit Pull, a soft credit pull mortgage option with no hard inquiry, so you can compare options before any credit impact.
Weigh closing costs against the PMI you will stop paying. Using the earlier illustration, $6,000 in costs divided by $158 a month is about 38 months, and any rate change moves that number. Do not count on a specific rate or approval until you have a written quote.
| Route | Typical cost | Timing | Appraisal needed | Best fit |
|---|---|---|---|---|
| Cancellation request | Low; possible appraisal or BPO fee | At 80% LTV, when you choose to ask | Only for current-value requests | Conventional borrowers with clean payment history and no second lien |
| Automatic termination | None | 78% scheduled LTV, or month 181 of a 30-year loan | No | Borrowers content to wait; costs extra months of PMI |
| Refinance | Full closing costs | When the new loan closes | Yes | FHA MIP that will not drop off, refused cancellations, or a worthwhile rate drop |
Some borrowers also compare channels such as Rocket, Movement, or Veterans United, which sell direct to consumers, with a broker who compares many sources. Each channel has different pricing and process, so compare written quotes.
Step 7: Verify the Removal and Monitor Your Escrow
Do not assume the cancellation worked. Check the next statement to confirm the PMI line is gone and the total payment dropped by roughly the amount you calculated. Ask the servicer for written confirmation of the cancellation date.
- Request a new escrow analysis. Your payment should now reflect principal, interest, taxes, and insurance only.
- Confirm the refund. Any unearned PMI premium should be returned within the period the Homeowners Protection Act requires, which the CFPB lists as 45 days. Verify the timing at the CFPB page and follow up if it passes.
- Recheck your assessment annually. Review your property tax assessment each year on the county assessments page, since taxes drive the escrow portion of your payment.
- Keep your records. File the cancellation letter, confirmation, and any appraisal with your closing documents.
Next Move: A PMI Removal Consultation With Duane Buziak
If your numbers show you are close to 80% LTV, or your servicer has refused to cancel, the next move is a PMI removal consultation with Duane Buziak, NMLS #1110647 (Coast2Coast Mortgage LLC, NMLS #376205). He can help you decide between cancellation and refinancing, and price the refinance as a mortgage pre approval without hard pull when that is the right path.
Ready to find your best mortgage rate from hundreds of lenders without impacting your credit score? Get your free no-touch pre-qualification today and discover exactly what you qualify for with personalized guidance from a trusted mortgage expert.
