How to Get Rid of PMI: 4 Ways to Drop It Early

Private mortgage insurance protects your lender, not you, and on a $315,000 loan it can cost more than $100 a month. Federal law says it has to end. The catch: the law sets the latest date, not the earliest one, and servicers rarely volunteer the earlier options.

This guide covers how to get rid of PMI under federal law and the Fannie Mae and Freddie Mac rules, then runs one buyer through all four routes, with the appraisal route modeled in ten states. A short explainer first, then the math.

1. How to Get Rid of PMI: The 4 Ways Side by Side

Quick Answer: There are four ways to get rid of PMI on a conventional loan: request cancellation in writing once your balance reaches 80% of the original value, prepay principal to hit that mark early, order a new appraisal so current value counts, or refinance. Do nothing, and PMI ends on its own at 78%.

Every route ends at the same place: a loan-to-value ratio of 80% or lower. What changes is which value the servicer uses, how long you wait, and what it costs.

Routes 1 and 2 use the value your lender wrote down at closing, so rising prices do not help there. Routes 3 and 4 use today’s value, which is why they matter most where prices climbed. Still shopping? The cleanest fix is a bigger down payment; our guide to how much house you can afford under the 28/36 rule shows what 20% down does to the payment.

2. The Rules: When a Servicer Must Cancel PMI

Quick Answer: Under the Homeowners Protection Act, you can ask to cancel PMI when your balance reaches 80% of the home’s original value, and the servicer must end it at 78% or at the loan’s midpoint. Fannie Mae and Freddie Mac add a second path: a new appraisal showing 75% to 80% of current value after two years.

Two rulebooks decide how to get rid of PMI. Federal law sets the floor for every conventional loan. Fannie Mae and Freddie Mac, which back most of them, go further.

What the Homeowners Protection Act guarantees

• Request at 80%. The CFPB’s guide to removing PMI confirms you can ask on the date your balance is scheduled to hit 80% of the original value, or earlier if extra payments got you there. Original value is the lower of the purchase price or the closing appraisal.
• Automatic at 78%. If you are current, the servicer must terminate PMI when the balance is scheduled to reach 78%, whether you ask or not.
• Final cutoff at the midpoint. PMI must end the month after the loan’s halfway point, 15 years into a 30-year loan, even if the balance is still above 78%.
• The first eligible date is on your PMI disclosure form. Dig it out before you call.

What Fannie Mae and Freddie Mac add

Fannie Mae’s Servicing Guide B-8.1-04 lets a borrower cancel on current value: 75% loan-to-value if the loan is two to five years old, 80% after five years, or 80% at any age if documented improvements raised the value. It also sets the payment record: current now, no 30-day late in the last 12 months, no 60-day late in the last 24. Not sure who backs your loan? Our overview of how a mortgage works from first payment to last explains how to find out.

3. Way 1: Request Cancellation at 80% of Original Value

Quick Answer: On a $350,000 home bought with 10% down at 6.76%, the balance is scheduled to reach 80% of value, or $280,000, in month 98, about eight years in. A written request that month ends PMI 14 months before automatic termination. A $24,231 prepayment at year three moves the request date to year three.

The written request is the cheapest answer to how to get rid of PMI, and the one most owners forget. Servicers cancel at 78% on their own; they cancel at 80% only if you ask.

How to request PMI cancellation

1. Find your original value. It is the lower of your purchase price and the closing appraisal, and it never changes for this route.
2. Check the balance against 80% of that number. Your monthly statement or the servicer’s portal shows the current principal.
3. Confirm your payment record. Current today, no 30-day lates in 12 months, no 60-day lates in 24 months, and no second mortgage on the home.
4. Send the request in writing. Use the servicer’s PMI cancellation form if it has one, and keep a copy. The servicer may still ask for evidence the value has not fallen.

Not at 80% yet? A lump sum gets you there. Our example buyer owes $304,231 after 36 payments; paying $24,231 toward principal drops the balance to $280,000 and unlocks the request five years early. Weigh that against what the cash could earn elsewhere, and use the loan payoff calculator to see how the same money shortens the loan. The payment record matters as much as the balance, so if a late payment already dinged your file, read what credit score lenders expect on a mortgage before borrowing anything new.

4. Way 2: Use a New Appraisal, State by State

Quick Answer: A new appraisal lets rising prices remove PMI years ahead of the original-value schedule. At last year’s pace, our 10%-down buyer qualifies in year 3 in Illinois, year 4 in New York, Pennsylvania, Ohio, and Michigan, year 6 in Florida and Georgia, and year 7 in Texas and North Carolina. In California, where prices slipped, it does not beat the schedule.

This is where how to get rid of PMI depends on your ZIP code. The FHFA’s House Price Index for the second quarter of 2026 shows U.S. prices up 2.1% in a year, with a spread from a 5.6% gain in Illinois to a 0.2% dip in California. We applied each state’s pace to the same $350,000 purchase at the Freddie Mac 30-year rate of 6.76% published September 10, 2026, and asked when the balance falls to 75% of current value (years two to five) or 80% (after year five).

Two things stand out. A 3% to 4% market beats the paper schedule by four years. And the five-year column is not a promise: it includes the 2021 price surge, and only the Great Lakes and Mid-Atlantic states are still running near that pace. Before you pay for an appraisal, ask the servicer which valuation it accepts, since some use a broker price opinion or an automated estimate instead. A low appraisal costs you the fee, though it also tells you what a home equity lender would see.

5. Way 3: Refinance Into a Loan Without PMI

Quick Answer: Refinancing removes PMI when the new appraisal puts the new loan at 80% loan-to-value or lower. It is the right route only when the new rate is at or below your current one, because closing costs usually dwarf a year of PMI. If your current rate is lower than today’s, use the appraisal route instead.

People searching how to get rid of PMI land on refinancing first, because lenders promote it. It works, but it replaces one loan with another, so judge it on the whole loan, not on PMI alone.

• It wins when rates fell. A lower rate plus no PMI cuts the payment twice. Our guide to when refinancing your mortgage pays off shows the break-even math.
• It loses when rates rose. Giving up a 4% loan to escape $134 a month of PMI is a bad trade; the higher rate costs more than the insurance.
• Closing costs reset the clock. Lender fees, title, and escrow come due again. Our guide to what closing costs cover and why lists each line.
• It is the only exit from lender-paid PMI. If the insurance is built into your rate, cancellation rights do not apply; only a refinance ends it.
• It pulls your credit. The hit is small and temporary, as how refinancing affects your score explains, but time it before any other borrowing.

6. Way 4: Wait for Automatic Termination, and What It Costs

Quick Answer: If you do nothing, PMI on the $315,000 loan terminates in month 112, about nine years and four months in. Freddie Mac puts PMI at $30 to $70 a month per $100,000 borrowed, so waiting costs this buyer $10,640 to $24,752, and about $15,000 at the 0.51% rate in Freddie Mac’s own example.

Doing nothing is a choice, and it has a price. Freddie Mac’s PMI guide gives the $30 to $70 range and uses 0.51% in its worked example. On a $315,000 loan that is $95 to $221 a month, with $134 in the middle. Here is what the meter reads at each milestone.

The gap between the two bold rows is the cost of not sending a letter: 14 months of premiums, or $1,876 at the midpoint rate. The gap between year 3 and month 112 is what the appraisal route is worth in a rising market.

7. Which Way Saves the Most? One Buyer, Five Outcomes

Quick Answer: For a $350,000 home with 10% down in a market rising 3.8% a year, the appraisal route at year four saves $8,576 in PMI against automatic termination, for the cost of one appraisal. A $24,231 prepayment at year three saves $10,184 but ties up the cash. The free request at month 98 saves $1,876.

Here is how to get rid of PMI, scored the way DollarVisor scores everything: what you pay, when it ends, and what you keep. Same buyer as Section 3, in a market like Michigan’s, at the $134 premium.

The prepayment posts the biggest number, but it is really a question of what else $24,231 could do. The appraisal route keeps the cash and still captures most of the savings, which makes it our pick in any market rising 3% or more. In a flat market, the written request is the whole answer. If you bought through a state assistance program, check its rules first; our state-by-state guide to first-time homebuyer programs covers the second liens that can block a cancellation.

8. When These Rules Do Not Apply: FHA, VA, USDA, and Lender-Paid PMI

Quick Answer: The four ways above apply to borrower-paid PMI on conventional loans. FHA mortgage insurance runs 11 years with at least 10% down and for the life of the loan with less, so a refinance is the only exit. VA loans have no monthly insurance, USDA loans carry an annual fee for life, and lender-paid PMI ends only by refinancing.

Before you spend a month chasing a cancellation, confirm which insurance you have. The word PMI gets used loosely, and how to get rid of PMI depends on the loan type.

• FHA. HUD’s Single Family Housing Policy Handbook 4000.1 sets the annual premium’s life: 11 years when the starting loan-to-value was 90% or less, otherwise the full term. Federal cancellation rights do not cover it; at 20% equity, a conventional refinance is the standard exit.
• VA. No monthly mortgage insurance; the one-time funding fee cannot be cancelled or refunded.
• USDA. An upfront guarantee fee plus an annual fee for the life of the loan. Refinancing is the only way off.
• Lender-paid PMI. The insurance is baked into a higher rate, so there is nothing to cancel until you refinance or sell.
• Second liens. A HELOC or down-payment-assistance lien can get a request denied even at 80%. Ask how the servicer treats it before you apply.

9. The Bottom Line

Quick Answer: How to get rid of PMI: send the written request the month your balance hits 80% of the original value, or sooner if prices in your state rose enough for a new appraisal to reach 75% after two years. Prepay only if the cash has no better use, and refinance only if you would refinance anyway.

Our verdict: the free request is the floor everyone should claim, and the appraisal route is the upgrade for anyone in a market gaining 3% or more a year. Both keep your loan and your rate. Refinancing and prepaying can save more, but each spends something the first two do not: a rate you might miss, or cash you might need.

That is how DollarVisor looks at every lending question: state-level numbers, the math shown, no lender paying for the ranking. Before you take any loan with less than 20% down, know what the pre-approval letter assumes about mortgage insurance, and keep our loans hub handy for the rest of the path from application to payoff.

10. Frequently Asked Questions

1. Can I cancel PMI without refinancing?

Yes. On a conventional loan you can request cancellation in writing once your balance reaches 80% of the home’s original value, and Fannie Mae and Freddie Mac also allow cancellation based on a new appraisal after two years of payments. Refinancing is only required for FHA, USDA, and lender-paid mortgage insurance.

2. How long do I have to pay PMI before I can remove it?

There is no minimum for the original-value route; you can request cancellation the day your balance hits 80%, even if extra payments got you there in year one. The appraisal route under Fannie Mae’s rules needs two years of payments, or none if the value rose because of documented improvements.

3. Does PMI go away automatically?

Yes, if you are current on payments. The servicer must terminate PMI on the date your balance is scheduled to reach 78% of the original value, and no later than the month after the loan’s midpoint, which is 15 years into a 30-year mortgage. Waiting for that date costs the most in premiums.

4. Can my servicer refuse to cancel PMI at 80%?

It can deny the request if you are not current, had a 30-day late payment in the past year or a 60-day late in the past two, if the home’s value has fallen, or if there is a second lien. Otherwise the Homeowners Protection Act requires cancellation once you reach 80% and ask in writing.

5. Is it worth paying for an appraisal to remove PMI?

Usually, in a rising market. In our model, an appraisal at year four in a market gaining 3.8% a year ended PMI 64 months early and saved about $8,576 at $134 a month, far more than an appraisal fee. In a flat or falling market it will not beat the original-value schedule, so save the fee.