When can I remove private mortgage insurance (PMI) from my loan?
You have the right to remove PMI for many mortgages, once you have paid down your mortgage to a specified point. Ending PMI reduces your monthly costs.
Some lenders and servicers may allow removal of PMI under their own standards. The information below describes the legal requirements that apply to mortgages for single-family principal residences that closed on or after July 29, 1999.
Mortgages through the (FHA) or Department of (VA) have different requirements. For answers to questions about mortgage insurance on an FHA or VA loan, contact your servicer. If your lender is paying for your mortgage insurance, different rules apply.
Can I request cancellation of my PMI when my principal balance is 80 percent of the home’s original value?
Yes. You have the right to ask your servicer to cancel PMI on the date the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. The first date you can make the request should appear on your PMI disclosure form, which you received along with your mortgage. If you can't find the disclosure form, contact your servicer.
You can ask to cancel PMI ahead of the scheduled date, if you have made additional payments that reduce the principal balance of your mortgage to 80 percent of the original value of your home.
For this purpose, “original value” generally means either the contract sales price or the appraised value of your home at the time you purchased it, whichever is lower. But, if you have refinanced, the “original value” is the appraised value at the time you refinanced.
Your servicer is legally required to grant your request to cancel your PMI as long as you meet the criteria below:
- You make your request in writing
- You have a good payment history and are current on your payments
- You can certify that there are no junior liens (such as a second mortgage) on your home
- You can provide evidence (for example, an appraisal) that the value of your property hasn’t declined below the original value of the home—if it has, you may not be able to cancel PMI on schedule
Is my PMI automatically canceled once my principal balance is 78 percent of the home’s original value?
Yes. Even if you don’t ask your servicer to cancel PMI, in general, your servicer must automatically terminate PMI on the date when your principal balance is scheduled to reach 78 percent of the original value of your home. For your PMI to be cancelled on that date, you need to be current on your payments. Otherwise, PMI will not be terminated until shortly after your payments are brought up to date.
Is my PMI automatically canceled once I am halfway through my loan’s term?
Yes. Your lender or servicer must end the PMI the month after you reach the midpoint of your loan’s amortization schedule. (This is true even if the principal balance has not reached 78 percent of the original value of your home.) The midpoint of your loan’s amortization schedule is halfway through the original full term of your loan. For 30-year loans, the midpoint is after 15 years have passed.
This standard for ending the PMI halfway through the loan’s original term is more likely to occur for people who have a mortgage with an interest-only period, principal forbearance, or a balloon payment. Keep in mind that you must be current on your monthly payments for termination to occur.
Can my PMI be canceled earlier if I have a loan backed by Freddie Mac or Fannie Mae?
Yes. Loan investors, including Fannie Mae and Freddie Mac, often create their own PMI cancellation guidelines. But these guidelines cannot be less favorable to the borrower than the ones above.
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