How to remove mortgage insurance depends on your loan and the type of coverage you have. Borrower-paid PMI on a conventional mortgage may be canceled after specific equity, payment-history, lien, and property-value requirements are met. FHA MIP and USDA annual fees follow different rules and may require waiting, paying off the loan, or refinancing.
Start by checking your mortgage statement, Closing Disclosure, or online servicing account to identify the charge before paying for an appraisal or making a large principal payment. (Consumer Financial Protection Bureau )
Key Takeaways Conventional borrower-paid PMI may generally be requested for cancellation when the loan reaches 80% of the home’s original value and other requirements are satisfied. Automatic PMI termination generally occurs when the loan is scheduled to reach 78% of the original value, provided the mortgage is current. Home appreciation may support an earlier PMI removal request, but investor, loan-seasoning, valuation, and payment-history rules apply. FHA annual MIP may last 11 years or the loan term, depending primarily on the original LTV and FHA case-assignment date. Refinancing may eliminate FHA MIP, a USDA annual fee, or another mortgage insurance structure, but the new rate, closing costs, loan term, and total interest should be compared. (Consumer Financial Protection Bureau ) Important: Federal PMI cancellation rules discussed in this guide generally apply to qualifying mortgages secured by single-family principal residences that closed on or after July 29, 1999. FHA, VA, lender-paid insurance, investment properties, multifamily properties, and some other mortgages may follow different rules. (Consumer Financial Protection Bureau )
What Type of Mortgage Insurance Do You Have? Mortgage insurance is not one product. Conventional PMI, FHA MIP, USDA annual fees, and lender-paid mortgage insurance have different cancellation rules, while VA loans generally do not charge monthly mortgage insurance. Identifying the loan program and how the charge appears in your documents is the first step toward choosing the correct removal strategy.
Insurance or loan type
Where you may see it
Can it end without refinancing?
Conventional borrower-paid PMI Mortgage statement, Loan Estimate, or Closing Disclosure Often, after cancellation requirements are met FHA annual MIP Mortgage statement and FHA loan documents Sometimes, based on case date and original LTV USDA annual fee USDA and servicing documents Generally remains for the life of the guaranteed loan Lender-paid mortgage insurance Loan pricing and closing documents Different rules apply; there may be no separate monthly charge to cancel Upfront or single-premium PMI Closing Disclosure Usually already paid or financed; refund rules vary VA loan VA loan documents VA loans generally have no monthly mortgage insurance
Private mortgage insurance protects the lender—not the homeowner—if the borrower stops making mortgage payments. It is different from homeowners insurance, which covers certain property losses and liability risks. (Consumer Financial Protection Bureau )
Where to Look for the Charge Review these documents:
Your latest mortgage statement The Projected Payments section of your Closing Disclosure Your original Loan Estimate Your escrow analysis Your online mortgage servicing account Your FHA, USDA, or VA loan documents Monthly conventional PMI generally appears in the Projected Payments section of the Loan Estimate and Closing Disclosure. Upfront PMI generally appears in the loan-cost section of the disclosure. (Consumer Financial Protection Bureau )
5 Ways to Remove or Stop Paying Mortgage Insurance Most homeowners have five possible paths: request conventional PMI cancellation at 80% of original value, qualify using the home’s current value, pay down principal, wait for automatic or midpoint termination, or replace or pay off the loan. The correct option depends on the insurance type, investor, servicer, loan age, payment history, and property.
Removal option
May be useful when
Important limitation
Request cancellation at 80% of original value You have conventional borrower-paid PMI Payment history, liens, and property value may be reviewed Request cancellation using current value Your home has appreciated or you completed major improvements Investor-specific seasoning and LTV rules apply Make additional principal payments Your balance is close to the cancellation threshold Confirm the exact target before transferring funds Wait for automatic or midpoint termination You want to keep the existing loan and avoid a valuation The 78% test uses the scheduled balance and original value Refinance or pay off the loan You have FHA MIP, a USDA annual fee, lender-paid MI, or broader refinance goals A new loan may have closing costs and different terms
Do not assume that having 20% equity automatically removes every type of mortgage insurance. The loan program and the method used to calculate equity matter.
Homeowners who are primarily trying to reduce their payment without replacing the existing loan can also explore our guide on how to lower my mortgage payment without refinancing .
How to Get Mortgage Insurance Removed From a Conventional Loan For many qualifying conventional loans, borrower-paid PMI may be removed without refinancing. You may request cancellation at 80% of the home’s original value, seek cancellation under investor rules based on current property value, make additional principal payments, or wait for automatic termination at the scheduled 78% threshold.
Homeowners approaching an 80% LTV may also want to understand how a standard conventional loan works when the mortgage balance is at or below 80% of the property value.
Request PMI Cancellation at 80% of the Original Value You may generally ask your mortgage servicer to cancel PMI when the balance is scheduled to reach 80% of the home’s original value. You may also request cancellation sooner if extra principal payments reduce the actual balance to that threshold. (Consumer Financial Protection Bureau )
For a purchase mortgage, “original value” generally means the lower of:
The contract purchase price The original appraised value For a refinance, it generally means the appraised value used for the refinance. (Consumer Financial Protection Bureau )
PMI Removal Formula Use this formula to estimate your original-value LTV:
Current principal balance ÷ original property value × 100 = LTV
Or calculate your target balance:
Original property value × 80% = estimated PMI cancellation balance
Hypothetical Example Assume:
Purchase price: $400,000 Original appraisal: $410,000 Original value for PMI purposes: $400,000 80% target balance: $320,000 Current principal balance: $317,000 In this example, the balance is below 80% of the original value. The homeowner may contact the servicer and request PMI cancellation.
Reaching the mathematical threshold does not by itself guarantee cancellation. The servicer may also review payment history, junior liens, property value, occupancy, investor requirements, and documentation.
Educational example only: This is for informational purposes and is not a commitment to lend or a determination that PMI will be canceled. Requirements depend on the loan, servicer, insurer, investor, property, and applicable law.
Requirements for an Original-Value Cancellation Request For qualifying loans covered by the federal cancellation rules, the borrower generally must:
Submit a written cancellation request Be current on the mortgage Have an acceptable payment history Certify that there are no junior liens, such as a second mortgage Provide evidence, if requested, that the home has not declined below its original value (Consumer Financial Protection Bureau ) A home equity line of credit (HELOC) , home equity loan, second mortgage, or other junior lien may affect the request even when the first-mortgage balance is below the target.
Can Home Appreciation Help Remove PMI? Yes. Some investors allow conventional PMI cancellation based on the home’s current market value, but the process is not automatic. Loan seasoning, LTV, payment history, property type, occupancy, improvements, and the investor’s approved valuation process may all affect eligibility.
For example, Fannie Mae’s current servicing guide generally uses the following standards for an eligible one-unit primary residence or second home:
Loan seasoning
Fannie Mae current-value LTV standard
Less than two years Generally not available based only on appreciation Between two and five years 75% or less More than five years 80% or less Less than two years with qualifying value-adding improvements The seasoning requirement may be waived; LTV must generally be 80% or less
Fannie Mae distinguishes substantial value-adding improvements—such as certain kitchen, bathroom, or square-footage additions—from ordinary repairs and maintenance. Freddie Mac, private investors, portfolio lenders, and mortgage insurers may use different standards. (Fannie Mae Servicing Guide )
Do Not Order an Appraisal First Contact your servicer before ordering or paying for an appraisal.
The servicer may require:
A valuation ordered through its own system A broker price opinion An automated valuation followed by an appraisal An interior and exterior property inspection A specific approved vendor An appraisal ordered independently may not satisfy the investor’s process.
Practical servicing note: Homeowners often focus on an online home-value estimate but overlook seasoning, payment history, junior liens, and the servicer’s required valuation channel. Calling the servicer first can prevent paying for a valuation that will not be accepted.
Make Additional Principal Payments Extra principal payments may help your loan reach the 80% original-value threshold sooner. However, sending a large payment does not necessarily cause PMI to disappear immediately.
Before making the payment, ask your servicer:
What exact principal balance is required? Must the payment be designated as principal-only? Is a written cancellation request required? Will a valuation still be needed? What payment-history standard applies? Does a junior lien affect eligibility? When would the PMI charge stop after approval? Protect your emergency reserves. Using cash to remove PMI may not be the best choice if it leaves you without sufficient savings for repairs, taxes, insurance, or unexpected expenses.
Homeowners considering putting a larger amount of cash into a new loan can separately review how a cash-in refinance works and how it differs from simply making an extra principal payment on the existing mortgage.
Wait for Automatic PMI Termination at 78% For many qualifying conventional loans, PMI must generally terminate automatically when the principal balance is scheduled to reach 78% of the home’s original value, provided the loan is current.
This is based on the original amortization schedule—not necessarily the date your actual balance reaches 78% because of additional payments. (Consumer Financial Protection Bureau )
Final Termination at the Loan Midpoint If PMI has not ended through another method, it generally must terminate after the loan reaches the midpoint of its original amortization period, provided the mortgage is current.
For a 30-year mortgage, the midpoint is generally after 15 years. This rule may be most relevant to mortgages with an interest-only period, principal forbearance, or balloon structure. (Consumer Financial Protection Bureau )
Conventional PMI Removal Methods Compared Method
Typical threshold
Borrower action required?
Value used
Borrower-requested cancellation 80% LTV Yes Original value Automatic termination 78% scheduled LTV No Original value Current-value cancellation Varies by investor Yes Approved current value Final termination Midpoint of original amortization period No Not primarily based on current value
How to Get Rid of Mortgage Insurance on an FHA Loan FHA mortgage insurance follows different rules from conventional PMI. For FHA case numbers assigned on or after June 3, 2013, annual MIP generally lasts 11 years when the original LTV was 90% or less and may remain for the loan term when the original LTV exceeded 90%.
FHA MIP Duration for Newer FHA Loans For FHA loans with case numbers assigned on or after June 3, 2013:
Original FHA LTV
General annual MIP duration
90% or less Until the end of the loan term or 11 years, whichever occurs first Greater than 90% Until the end of the loan term or 30 years, whichever occurs first
HUD states that borrowers with these loans may not request early annual MIP cancellation merely by making principal prepayments. (HUD Answers )
Does Reaching 20% Equity Remove FHA MIP? Generally, no—not for many FHA loans subject to the post-June 3, 2013 rules.
The home may appreciate, and the borrower may reduce the loan balance below 80% of the home’s current value, but that does not create the same cancellation right that applies to qualifying conventional borrower-paid PMI.
For a deeper comparison of original LTV, current equity, MIP duration, and conventional refinancing, review how much equity you need to remove FHA MIP .
What About Older FHA Loans? Older FHA loans may be subject to earlier cancellation rules.
The following dates and details matter:
FHA case-assignment date Closing date Original LTV Mortgage term Initial amortization schedule Current principal balance HUD states that certain FHA loans closed on or after January 1, 2001, with case numbers assigned before June 3, 2013, may qualify for automatic MIP cancellation under earlier rules. Current appraised value is not necessarily used for that calculation. (HUD Answers )
Check your closing documents or ask your servicer for:
Your FHA case number The case-assignment date Your original LTV Your scheduled final MIP date Can Refinancing Remove FHA Mortgage Insurance? Possibly. Paying off the FHA loan through a conventional refinance loan may end the FHA MIP on the existing loan.
However, the new conventional mortgage may still require PMI if the resulting LTV is above the applicable threshold. Approval and pricing also depend on credit, income, assets, appraisal, property eligibility, underwriting, lender requirements, and investor guidelines.
How to Eliminate Mortgage Insurance on USDA, VA, and Lender-Paid Loans USDA annual fees, VA loan charges, and lender-paid mortgage insurance do not follow the standard conventional PMI cancellation process. USDA annual fees generally continue for the life of the guaranteed loan, VA loans generally have no monthly mortgage insurance, and lender-paid insurance may be reflected in the loan’s pricing rather than a removable monthly premium.
USDA Annual Fee A USDA home loan uses a different insurance and guarantee-fee structure from a conventional mortgage. The USDA Single Family Housing Guaranteed Loan Program assesses an annual fee for the life of the guaranteed loan. Building 20% equity generally does not cancel that fee on the existing USDA mortgage. (Rural Development )
Common ways the annual fee may end include:
Paying off the mortgage Selling the property and paying off the loan Refinancing into another eligible mortgage program A new mortgage remains subject to qualification, closing costs, appraisal requirements, and the terms available at that time.
VA Loans For eligible military borrowers wondering, ’Does a VA Loan Have PMI? ’, the short answer is that VA loans generally do not have monthly private mortgage insurance or FHA-style monthly MIP.
Many VA borrowers instead pay a one-time VA funding fee, although certain eligible veterans and surviving spouses may be exempt. The funding fee is separate from monthly mortgage insurance and is not removed through the conventional PMI cancellation process. (Benefits )
Lender-Paid Mortgage Insurance With lender-paid mortgage insurance, there may be no separately listed monthly premium for the borrower to cancel. The insurance cost may instead be reflected in the overall loan pricing.
Homeowners comparing lender-paid MI, piggyback structures, government-backed loans, and other no PMI mortgage programs should compare the entire loan structure rather than only whether a separate PMI charge appears.
The CFPB notes that some conventional loans offered without a separate PMI charge may have a higher interest rate as a tradeoff. Whether that pricing structure is more or less expensive depends partly on how long the borrower keeps the loan. (Consumer Financial Protection Bureau )
Refinancing may replace the lender-paid structure, but compare:
The current interest rate The proposed interest rate Closing costs The new loan term Total interest The expected time in the home Whether the new loan requires borrower-paid PMI Upfront or Single-Premium PMI If PMI was paid upfront or financed into the loan, there may be no monthly premium to remove.
The CFPB warns that a borrower who pays PMI upfront and later sells or refinances may not be entitled to a refund. Review the original insurance disclosure and closing documents for the applicable provisions. (Consumer Financial Protection Bureau )
How to Get Mortgage Insurance Removed: Step-by-Step To get mortgage insurance removed, first identify the insurance type, confirm the original property value and current balance, and ask your servicer for the applicable cancellation rules. Complete only the valuation process the servicer approves, submit the required request and documents, and verify the change on a future mortgage statement.
Step 1: Identify the Loan and Insurance Type Look for terms such as:
Private mortgage insurance Borrower-paid PMI Lender-paid MI FHA MIP Mortgage insurance premium USDA annual fee Guarantee fee Upfront PMI Do not assume every mortgage-insurance-related charge is conventional PMI.
Step 2: Find Your Original Property Value For a purchase loan, locate:
The contract purchase price The original appraised value The lower amount generally serves as the original value for federal PMI cancellation purposes.
For a refinance, locate the appraised value used when the current mortgage was originated.
Step 3: Check Your Current Principal Balance Use the unpaid principal balance—not the original loan amount and not the total payment shown on your statement.
Calculate:
Current balance ÷ original value × 100 = original-value LTV
You may also estimate a current-value LTV, but the servicer may require an approved valuation before using that figure.
Step 4: Contact Your Mortgage Servicer Ask:
What type of mortgage insurance am I paying? Is it borrower-paid, lender-paid, FHA, USDA, or another form? Who owns or guarantees my mortgage? What is my scheduled cancellation date? What is my automatic termination date? What exact balance is required for a cancellation request? Can I request cancellation using current property value? What seasoning requirement applies? What payment history is required? Does a HELOC or second mortgage affect the request? What type of valuation is required? How must the valuation be ordered? Is there a valuation fee? How should I submit my request? When will the payment change after approval? Step 5: Complete the Approved Valuation Process Do not order your own appraisal unless the servicer confirms it will be accepted.
Keep copies of:
The valuation order The appraisal or broker price opinion The payment receipt Renovation records Permits and invoices Before-and-after documentation, when relevant Step 6: Submit a Written Request Even when a servicer accepts requests by phone, a written request creates a clearer record.
Sample PMI Cancellation Request Subject: Request to Cancel Borrower-Paid Private Mortgage Insurance
Borrower name: [Name]
I am requesting cancellation of borrower-paid private mortgage insurance on the mortgage listed above.
Please confirm the applicable cancellation standard, required principal balance, property-valuation process, payment-history requirement, junior-lien requirement, and any documents or fees needed to complete the review.
Please also provide the decision and effective cancellation date in writing.
Sincerely,
Step 7: Verify the Result If the request is approved, confirm:
The effective PMI termination date The date of the final premium The updated mortgage payment Whether an escrow analysis will occur Whether any unearned premium refund applies The final payment change may not equal the old PMI charge exactly if taxes, homeowners insurance, escrow reserves, or other escrow items are adjusted at the same time. Fannie Mae’s servicing guide specifically addresses how escrow analysis may affect the resulting payment. (Fannie Mae Servicing Guide )
If the request is denied, ask for:
The reason in writing The LTV or value used The payment-history issue, if any The applicable seasoning rule The balance or date required for a future request Instructions for disputing factual errors Should You Refinance to Eliminate Mortgage Insurance? Refinancing may eliminate FHA MIP, a USDA annual fee, lender-paid insurance, or conventional PMI, but removing the insurance charge does not automatically make the new mortgage less expensive. A refinance replaces the existing loan and may introduce closing costs, a different rate, a new repayment term, and additional total interest.
If you are unsure about timing, reading our checklist on when should I refinance my mortgage can help frame the decision around equity, closing costs, mortgage insurance, loan term, and the break-even period.
Compare the Available Strategies Strategy
Main potential benefit
Main tradeoff
Request conventional PMI cancellation Keeps the current rate and loan Only applies when cancellation requirements are met Make a principal payment May reach the cancellation threshold sooner Uses available cash Use current property value May recognize appreciation or improvements Valuation and seasoning rules apply Wait for automatic termination Avoids refinancing and valuation costs PMI continues until the scheduled date Refinance May replace FHA, USDA, lender-paid MI, or an unfavorable loan structure New qualification, closing costs, rate, and term
Questions to Review Before Refinancing Compare:
Current interest rate versus proposed rate Current mortgage insurance versus possible new PMI APR Estimated closing cost New loan amount Remaining term on the current mortgage Proposed new term Total monthly housing expense Break-even period Total interest over the expected holding period Cash reserves after closing The CFPB notes that refinancing may involve many of the same steps and costs as obtaining the original mortgage. A longer replacement term may lower the payment while increasing the total amount paid over time. (Consumer Financial Protection Bureau )
Simple Break-Even Formula Estimated refinance costs ÷ estimated monthly savings = approximate break-even period
Hypothetical Educational Example Assume:
Estimated refinance costs: $4,800 Estimated reduction in total monthly mortgage expense: $160 Approximate break-even period: 30 months If the homeowner expects to sell, move, or refinance again before 30 months, the transaction may not recover its estimated upfront cost.
This calculation does not measure total interest, tax consequences, opportunity cost, changes in equity, or every loan feature.
This hypothetical example is for informational purposes only and is not a mortgage offer, commitment to lend, or promise of savings. Actual terms depend on credit, income, assets, property, appraisal, underwriting, lender, and investor guidelines.
Practical Example: The Same Equity Can Produce Different Results Two homeowners may each have approximately 20% current equity but face completely different mortgage insurance rules. A conventional borrower may be able to request PMI cancellation, while an FHA borrower with a newer high-LTV loan may continue paying MIP unless the scheduled period ends or the FHA mortgage is paid off.
Scenario A: Conventional PMI Assume:
Original purchase price: $450,000 Original appraisal: $460,000 Original value: $450,000 Current principal balance: $356,000 Calculation:
$356,000 ÷ $450,000 = approximately 79.1% LTV
The borrower may be able to request PMI cancellation based on original value, subject to payment history, current status, property value, junior liens, and servicing requirements.
Scenario B: FHA MIP Assume:
FHA case number assigned after June 3, 2013 Original LTV above 90% Home has since appreciated Current estimated equity is greater than 20% The current equity level does not generally create a right to cancel annual FHA MIP. The borrower may compare keeping the FHA loan with refinancing into an eligible conventional or other mortgage program. (HUD Answers )
The lesson: Equity is only one part of the analysis. The insurance type and original loan structure often determine the available path.
Common Mortgage Insurance Removal Mistakes The most common mistakes come from applying conventional PMI rules to every mortgage, relying on an informal home-value estimate, or spending money before confirming the servicer’s process. Homeowners may also focus only on the insurance charge and overlook interest rate, closing costs, loan term, cash reserves, and total borrowing cost.
Assuming 20% Current Equity Automatically Removes PMI Borrower-requested cancellation at 80% is commonly based on the home’s original value. A different investor-approved process may apply when using appreciation and current property value.
Confusing Conventional PMI With FHA MIP Conventional PMI cancellation rights do not automatically apply to FHA annual MIP.
Ordering an Independent Appraisal Too Soon The servicer may reject an appraisal that was not ordered through its approved channel.
Making a Large Principal Payment Without a Written Target The payment may reduce the balance but still leave the loan short of the required threshold or another requirement.
Ignoring a HELOC or Second Mortgage A junior lien may affect a PMI cancellation request.
Refinancing Only to Remove Mortgage Insurance A higher rate, longer term, or substantial closing costs may offset the benefit of eliminating the insurance charge.
Looking Only at Monthly Payment A lower payment can result from extending the repayment period. Compare total interest and the expected time you will keep the mortgage.
Loan Factory can help homeowners compare their current mortgage with potential refinance structures rather than focusing only on the mortgage insurance charge. Borrowers can review lender options, loan programs, estimated costs, and long-term tradeoffs with a licensed mortgage loan officer before deciding whether refinancing may fit their goals.
Loan Factory offers:
Access to a network of 240+ wholesale lenders Conventional, FHA, VA, USDA, Jumbo, and other eligible mortgage options Side-by-side lender and program comparisons Licensed mortgage loan officers Technology-supported pricing and loan workflow through TERA Guidance comparing rate, APR, mortgage insurance, costs, term, and estimated cash to close Loan Factory’s official website states that its loan officers have access to TERA and a network of more than 240 wholesale lenders. Available programs and lender participation may change, and every loan remains subject to eligibility, underwriting, lender, and investor requirements. (Loan Factory )
Compare Mortgage Options Compare mortgage and refinance options to review whether keeping your current loan, requesting PMI cancellation, or refinancing may better support your goals.
Ready to Submit an Application? Apply online with Loan Factory or speak with a licensed loan officer at (660) 333-3333.
A refinance is a new mortgage transaction and is subject to credit, income, assets, appraisal, property eligibility, underwriting, lender, and investor guidelines.
Author Box Written by: Loan Factory Mortgage Education Team
Loan Factory is a technology-powered mortgage platform helping borrowers compare mortgage options through a broad wholesale lender network. Our mortgage education content is designed to help homeowners understand PMI removal, private mortgage insurance, refinancing, mortgage payments, escrow, loan documents, and the home loan process before applying or refinancing.
Mortgage Disclaimer This content is for educational and informational purposes only. It is not legal, tax, financial, or investment advice and is not a commitment to lend, an approval, or a guarantee that mortgage insurance can be canceled.
Mortgage insurance requirements, cancellation rights, valuation standards, interest rates, APRs, loan programs, closing costs, and underwriting standards vary by loan type, origination date, mortgage servicer, insurer, lender, investor, borrower profile, property, and applicable law.
Refinancing replaces an existing mortgage with a new loan and may involve closing costs, a different interest rate, a new repayment term, and increased total interest. Consult your mortgage servicer regarding cancellation of insurance on your existing loan and a licensed mortgage professional regarding potential refinance options.
Frequently Asked Questions 
