How to Get Rid of PMI (and Stop Overpaying)
Private mortgage insurance protects your lender, not you — and if you put less than 20% down, you're probably paying it every month. The good news: PMI is temporary, and if you know the rules, you can drop it years earlier than most homeowners realize.
The two numbers that matter: 80% and 78%
Under the federal Homeowners Protection Act, there are two automatic milestones (Garypedia):
- 80% LTV — you request it: Once your loan balance drops to 80% of the original purchase price, you can submit a written request to cancel PMI.
- 78% LTV — it's automatic: The servicer must cancel PMI on its own once the balance hits 78% of the original value, as long as you're current on payments (Garypedia).
The PMI removal calculator shows exactly when you'll hit each milestone and how much you'll save.
The appreciation shortcut
Here's what most people miss: you don't have to wait for the loan to amortize down. If your home has appreciated, you may already have 20% equity based on the current value — and a single appraisal (often a few hundred dollars) can eliminate PMI immediately (Garypedia). In a market that's risen since you bought, this is by far the fastest path.
The four ways out
- Pay down to 80% and request it — the standard route.
- Wait for automatic cancellation at 78% — no action needed, but slower.
- Get a new appraisal — if appreciation has pushed your equity past 20%.
- Make extra principal payments — accelerate your way to 80% ahead of schedule.
Why it's worth the effort
PMI commonly runs $100–$300+ a month depending on your loan size and credit. On a $285,000 loan that's often around $150/mo — roughly $1,800 a year going straight to the insurer with zero benefit to you. Dropping it even a year early is real money back in your pocket.
One caveat: FHA loans are different
The 80/78 rules apply to conventional loans. FHA loans carry a separate mortgage insurance premium (MIP) that, for most modern FHA loans, lasts the life of the loan unless you refinance into a conventional mortgage. If you're on an FHA loan with 20%+ equity, a refinance is usually the only way to shed the insurance.
Check your own timeline with the PMI removal calculator, and if your home has gained value, call your servicer about an appraisal-based removal — it's the single highest-leverage move.
Ready to run your own numbers?
Open the PMI Removal Calculator →