Understand · Mortgage insurance
How private mortgage insurance cancellation generally works
PMI cancellation depends on the insurance arrangement, loan type, original property value, scheduled balance, payment status, and sometimes additional servicer or investor requirements.
The short answer
For many covered conventional mortgages, you may request PMI cancellation in writing at the scheduled 80% balance date if you satisfy the conditions. Automatic termination generally applies at the scheduled 78% date when payments are current, with another protection at the loan's amortization midpoint.
01 · Start with the contract
Identify what kind of mortgage insurance you have
Private mortgage insurance usually applies to a conventional loan and protects the lender if the borrower defaults. It does not protect the borrower from foreclosure and is different from homeowners insurance.
- Conventional PMI, FHA mortgage insurance, VA guarantee, or another program
- Borrower-paid or lender-paid mortgage insurance
- Original property value under the applicable rule
- Scheduled principal balance and cancellation date
- Current payment status and good payment history
- Servicer or investor rules that may permit earlier removal
FHA mortgage insurance and VA-backed loans follow different program requirements. Lender-paid mortgage insurance also follows different rules. Check the disclosure and ask the servicer which contract and program apply.
02 · The denominator
The federal thresholds use original value
For a home purchase, “original value” generally means the lower of the contract sales price or appraised value at purchase. For a refinance, it generally means the appraised value at the time of refinancing. This is not automatically the home's current market value or the price shown by an online estimate.
- 80% request point
- Principal balance equals 80% of original value, subject to request conditions.
- 78% automatic point
- Scheduled principal balance reaches 78% of original value, generally with payments current.
- Midpoint
- Halfway through the loan's original amortization schedule.
- Current value route
- May exist under investor or servicer rules, with separate conditions.
03 · Borrower request
Request cancellation in writing at the 80% date
For covered loans, the first scheduled date to request cancellation should appear in the PMI disclosure received at closing. Extra principal payments can bring the actual balance to 80% of original value before that scheduled date.
A servicer may require the conditions described by CFPB guidance:
- Make the cancellation request in writing.
- Be current and have a good payment history.
- Certify that the property has no junior lien, such as a second mortgage.
- Provide requested evidence that the property value has not declined below original value.
Reaching a percentage alone does not replace these request steps. Ask for the servicer's exact submission instructions and any permitted valuation requirement before ordering an appraisal.
04 · Servicer action
Automatic termination uses the scheduled balance
In general, the servicer must automatically terminate PMI on the date the scheduled principal balance reaches 78% of original value, even if the actual balance differs because payments were made ahead or behind schedule. Payments must be current; otherwise, termination occurs after they are brought current.
A separate final-termination rule generally ends PMI the month after the loan reaches the midpoint of its original amortization schedule, again subject to being current. This can matter for loans whose balance does not reach 78% by the midpoint.
05 · Other policies
Ask whether investor rules allow earlier removal
Some servicers and investors, including Fannie Mae and Freddie Mac, may offer cancellation standards that are more favorable than the federal minimum. These routes can consider current value, seasoning, payment history, loan-to-value, and property type under their own published requirements.
Ask who owns or guarantees the loan, which cancellation policy applies, what valuation method is accepted, and what fee—if any—the borrower must pay. Do not order a valuation until the servicer confirms it will satisfy the applicable process.
06 · Document the request
Keep the balance calculation and response together
- PMI disclosure received at closing
- Promissory note and amortization schedule
- Current mortgage statement and principal balance
- Payment-history records
- Evidence requested about property value or junior liens
- Written cancellation request and servicer response
If the servicer denies cancellation, request the reason and the specific condition that remains unmet. If you cannot resolve a servicing issue directly, CFPB complaint and HUD-approved housing-counseling routes are available.
07 · Official guidance