Once you owe less than 80% of your home’s value, you can demand your lender drop private mortgage insurance — often $100 or more off every monthly payment

Every month, millions of homeowners write a check that includes a line item most of them would rather not think about: private mortgage insurance. PMI exists to protect the lender if you default, and it was tacked onto your payment because you put less than 20% down when you bought the house. On a $350,000 conventional mortgage with a PMI rate of 0.75%, that protection costs you roughly $219 a month. And unlike homeowners insurance, it does absolutely nothing for you.

Here is what a lot of those homeowners don’t realize: federal law gives you the right to demand cancellation once your remaining loan balance drops to 80% of your home’s original value. The statute has been in effect since 1999, the process is straightforward, and acting on it instead of waiting for PMI to fall off on its own can save you well over $1,000 a year.

The federal law behind PMI cancellation

The Homeowners Protection Act of 1998 (12 U.S.C. 4901-4910) applies to conventional residential mortgages and establishes two separate triggers for ending PMI:

• Borrower-requested cancellation at 80% LTV. Once your principal balance is scheduled to reach 80% of the home’s original purchase price (or the appraised value at closing, if that was lower), you can submit a written request to your loan servicer. You must be current on payments and have a clean recent history, which generally means no payments 30 or more days late in the prior 12 months and none 60 or more days late in the prior 24 months.
• Automatic termination at 78% LTV. If you never make that request, your servicer is required by law to terminate PMI once the balance hits 78% of original value. No action on your part is needed, according to the Consumer Financial Protection Bureau.

Both thresholds are measured against the property’s original value at the time the loan closed, not its current market value. That distinction matters, and we will come back to it.

There is also a backstop: even if your balance hasn’t reached 78% by the midpoint of your loan’s amortization schedule (year 15 on a 30-year mortgage), the servicer must cancel PMI at that point. The Office of the Comptroller of the Currency highlights this provision as a safeguard for borrowers whose loans may not be amortizing as quickly as expected.

The 80%-to-78% gap costs more than you’d think

Two percentage points sounds like a rounding error. It isn’t. On a $350,000 mortgage, the gap between 80% and 78% LTV represents roughly $7,000 in principal. Depending on your interest rate and how far into the loan you are, paying down that $7,000 through regular monthly payments can take 12 to 18 months. Every one of those months, you are still paying PMI for no reason.

PMI rates on conventional loans typically range from about 0.5% to 1.5% of the original loan amount per year. A 2018 Freddie Mac overview cited that range, and industry pricing as of 2025 remains broadly consistent with it. Your exact rate depends on your credit score, down payment size, and loan type. In monthly dollars, that looks like this:

• $250,000 loan at 0.5% PMI: about $104/month
• $350,000 loan at 0.75% PMI: about $219/month
• $500,000 loan at 1.0% PMI: about $417/month

Multiply any of those figures by 12 to 18 months of unnecessary payments, and the cost of passivity becomes obvious. At $219 a month, waiting for automatic termination instead of requesting cancellation at 80% could mean throwing away $2,600 to $3,900.

How to request cancellation, step by step

The process is simpler than most borrowers expect, but your servicer will not call you when you hit 80%. You have to take the first step.

1. Check your amortization schedule. Your original loan documents include a schedule showing when your balance is projected to reach 80% of the home’s original value. Most servicers also display this in their online portals. If you’ve made extra principal payments, you may reach the threshold ahead of schedule.
2. Submit a written request. The statute requires it in writing. A brief letter or secure message through your servicer’s portal works. State that you are requesting cancellation of PMI under the Homeowners Protection Act, cite your current balance and the original value of the property, and ask for written confirmation of the cancellation date.
3. Confirm you meet the payment history requirement. Your servicer will verify that you have no recent late payments. If you’ve had a late payment in the past year or two, address it before you submit.
4. Respond to any servicer conditions. Some servicers may require certification that there are no subordinate liens (such as a home equity line of credit) on the property, or that the property has not declined in value. These conditions should have been disclosed at closing. If the servicer requests a new appraisal, you will typically need to pay for it out of pocket.
5. Verify the charge is removed. Once cancellation is confirmed, check your next mortgage statement to make sure the PMI line item is gone. If it isn’t, follow up in writing and keep a copy.

Under the statute, your servicer is also required to send you an annual notice explaining your cancellation rights and the projected date of automatic termination. If you haven’t been receiving those notices, that itself may be a compliance violation worth raising with the servicer or reporting to the CFPB’s complaint portal.

Using a new appraisal when your home has gained value

This is the question homeowners in hot markets ask first: “My house is worth way more than when I bought it. Can I use that to get rid of PMI sooner?”

The short answer is yes, but the path is different from the standard cancellation process. The Homeowners Protection Act’s 80% and 78% thresholds are pegged to the home’s original value. However, the Fannie Mae and Freddie Mac servicing guides allow servicers to consider a current appraisal when evaluating early cancellation requests. The specifics vary by investor and by how long you’ve held the loan:

• If you’ve owned the home for two to five years, many servicers will approve cancellation if a new appraisal shows your LTV is at or below 75%.
• If you’ve owned it for more than five years, the threshold is typically 80%.

The catch: you will almost certainly pay for the appraisal yourself. Industry estimates commonly place the cost in the range of $400 to $700, though the actual figure depends on your market and property type. The servicer chooses the appraiser, and there is no guarantee the number will come in where you hope. But for homeowners in markets where values have climbed 15% or 20% since purchase, this route can eliminate PMI years ahead of the original schedule.

What if your servicer drags its feet?

The Homeowners Protection Act doesn’t just give you the right to request cancellation. It also puts your servicer on a clock. Once you submit a valid written request and meet all the conditions, the servicer must act. The CFPB has enforcement authority over the statute, and borrowers who believe their servicer has failed to comply can file a complaint directly.

A few situations that can slow things down or create friction:

• The servicer claims your property value has declined. If the servicer believes the home is worth less than its original value, they may require an appraisal before approving cancellation. You can request a copy of any valuation they rely on.
• You refinanced. If you’ve refinanced your mortgage, the clock resets. The “original value” for PMI purposes becomes the appraised value at the time of the refinance, and the LTV thresholds apply to the new loan.
• Your loan was sold to a new servicer. Servicing transfers don’t change your rights under the statute, but they can create paperwork confusion. Keep copies of your cancellation request and any responses.

If you hit a wall, the CFPB complaint process is free and typically prompts a response from the servicer within 15 days.

Loans this law does not cover

The Homeowners Protection Act applies only to conventional residential mortgages. Government-backed loans play by different rules:

• FHA loans: Mortgage insurance premiums on FHA loans are governed by the Department of Housing and Urban Development. For FHA loans originated after June 3, 2013, with a down payment of less than 10%, MIP lasts for the life of the loan, per HUD’s premium schedule. The only way to eliminate it is to refinance into a conventional loan.
• VA loans: VA-guaranteed loans do not carry traditional PMI. Most VA borrowers pay a one-time funding fee at closing, with no ongoing monthly insurance premium to cancel.
• USDA loans: USDA Rural Development loans carry an annual guarantee fee that functions like mortgage insurance and cannot be canceled without refinancing.

Borrowers with these loan types who want to shed mortgage insurance costs will generally need to refinance into a conventional loan with at least 20% equity, which involves its own closing costs and rate considerations.

One more category worth knowing about: lender-paid mortgage insurance, or LPMI. Some conventional loans bundle the cost of PMI into a slightly higher interest rate instead of charging a separate monthly premium. Because there is no standalone PMI charge on your statement, there is nothing to cancel. The higher rate stays for the life of the loan unless you refinance.

How to check your PMI cancellation eligibility in five minutes

No federal agency publishes regular data on how many PMI cancellation requests servicers process each year, or how often valid requests get denied. That gap makes it hard to know whether the system works smoothly at scale or whether some servicers are quietly dragging their feet.

What is clear: the legal protections are specific and enforceable. The statute spells out the thresholds, the notice requirements, and the servicer’s obligations in detail. Borrowers who know the rules have real leverage.

If you are still paying PMI on a conventional loan, the first step takes five minutes. Log into your servicer’s portal, check your current balance against your home’s original value, and divide. If the result is 0.80 or less, you have the right to request cancellation today. If it is close, start planning, whether that means making a lump-sum principal payment or ordering an appraisal to capture recent appreciation. At $100 to $400 a month, every month you wait is money you won’t get back.