When Does PMI Come Off?

When Does PMI Come Off? PMI Removal Rules for 2026

On a conventional mortgage for your principal residence, private mortgage insurance (PMI) comes off in one of three ways: you can ask to cancel it once the balance reaches 80 percent of the home's original value, the servicer must end it automatically when the original schedule reaches 78 percent, and it must end by the loan's midpoint regardless. For a $400,000 home bought with 10 percent down at 6.5 percent over 30 years, that is payment 95 for a request and payment 109 for automatic termination.

By Finance Editorial Desk | October 21, 2026

Educational only, not legal or lending advice. Your servicer's written policy and your loan documents control. Every borrower below is a labeled hypothetical, and every amortization figure was computed for this guide from the stated inputs.

1. The three exits from PMI, side by side

The federal rules come from the Homeowners Protection Act of 1998 (HPA), codified at 12 U.S.C. 4901 for definitions and 12 U.S.C. 4902 for cancellation and termination (statute text checked October 2026). The Consumer Financial Protection Bureau summarizes them on its page When can I remove private mortgage insurance from my loan? (checked October 2026). The CFPB notes they apply to single-family principal residences on loans that closed on or after July 29, 1999.

Two words in that table carry most of the weight. "Original value" is defined in 4901 as the lesser of the contract sales price or the appraised value at closing. On a refinance it is the appraised value the lender relied on for the refinance. "Scheduled" means the amortization table built at closing, not your current statement. Those two definitions explain almost every surprise borrowers run into.

2. Worked example: when PMI comes off a $360,000 loan

Inputs (hypothetical): purchase price and appraisal both $400,000, so original value is $400,000. Down payment 10 percent, $40,000. Loan $360,000 at a fixed 6.5 percent for 30 years (360 monthly payments). Monthly principal and interest is $2,275.44. Taxes, insurance and the PMI premium itself sit outside that figure.

The targets. 80 percent of $400,000 is $320,000. 78 percent is $312,000. The midpoint of a 360-month amortization is month 180.

The first payment. Monthly interest is 6.5 percent divided by 12, applied to the balance: $360,000 x 0.065 / 12 = $1,950.00. The principal portion is $2,275.44 minus $1,950.00 = $325.44. That small principal slice is why the early years move the balance so slowly.

Running the full schedule month by month gives these checkpoints:

So the balance is first scheduled to drop to $320,000 or below at payment 95, which is 7 years and 11 months into the loan. That is your cancellation date on the original schedule, and it should match the date on the PMI disclosure you received at closing. The balance is first scheduled to drop to $312,000 or below at payment 109, 9 years and 1 month in. That is the automatic termination date. The midpoint at month 180 never matters on this loan, because the 78 percent date arrives six years earlier.

What the 14-month gap is worth. Assume, for illustration only, a PMI premium of $150 a month (your premium is on your Closing Disclosure; this guide does not estimate PMI pricing). Requesting cancellation at payment 95 instead of waiting for payment 109 avoids 14 premiums, which is $2,100. The request costs you a letter and whatever value evidence the servicer asks for.

3. Why extra principal moves only the request date

This is the rule most often misread. The HPA defines the cancellation date with an either-or: the date the balance is first scheduled to reach 80 percent, or the date your actual payments bring it to 80 percent, at your option. The termination date at 78 percent, for a fixed-rate loan, is "based solely on the initial amortization schedule." Prepaying does not pull it forward.

So prepaying principal can earn you an earlier cancellation, but only if you ask for it. Nothing happens automatically when your actual balance crosses 78 percent ahead of schedule. A borrower who prepays and then waits for the servicer may keep paying premiums until payment 109, years after the balance stopped justifying them.

Here is how extra principal changes the request date on the same $360,000 loan, each extra amount added every month starting with payment 1:

The last column is the point of the table. It never moves.

A $200 a month plan, in dollars. At payment 64 the balance is $319,934.65, under the $320,000 line. By then you have paid $12,800 of extra principal (64 x $200). That money is not spent; it is equity, and it also cuts lifetime interest: total interest over the life of the loan falls from $459,160.16 to $350,243.31 if you keep the $200 going to payoff, a difference of $108,916.85, and the loan ends at payment 287 instead of 360. On the PMI side, with the same illustrative $150 premium, cancelling at payment 64 rather than 95 skips 31 premiums ($4,650), and compared with waiting for automatic termination at payment 109 it skips 45 premiums ($6,750).

One lump sum instead. A single prepayment changes the arithmetic differently. Five years in, after payment 60, the balance is $336,999.52, which is $16,999.52 above the 80 percent line. A lump sum of about $17,000 at that point puts you at 80 percent immediately. A $10,000 lump sum at payment 60 gets the balance under $320,000 at payment 74 instead of 95. A $10,000 lump sum with the very first payment gets there at payment 67. Earlier money does more work, because every later payment's interest is computed on a smaller balance.

To build these schedules for your own loan, the amortization calculator shows the month-by-month balance, and the principal paydown calculator models a recurring extra payment.

4. Months to 80% and 78% at different down payments and rates

The table below was computed for this guide. Every row assumes a $400,000 purchase price that equals the appraisal, a fixed-rate 30-year loan, no extra payments, and on-time payments. The two numbers in each cell are the payment number at which the original schedule first reaches 80 percent and 78 percent of $400,000. P&I is monthly principal and interest.

Monthly P&I at 6.5 percent for reference: $2,452.42 on $388,000, $2,401.86 on $380,000, $2,275.44 on $360,000 and $2,149.03 on $340,000.

Patterns worth noticing.

• Moving from 5 to 10 percent down removes about 2.25 to 2.5 years of scheduled PMI, and moving from 10 to 15 percent removes roughly 3 more. At 6.5 percent, the request date goes from payment 124 to 95 to 56.
• Rate matters more than many buyers expect. At 10 percent down, every half point of rate adds about 5 to 6 months to both dates, because more of each payment goes to interest.
• At 3 percent down, the 78 percent date sits about 11 to 13 years out. For those borrowers, the request route at 80 percent is worth more in absolute terms, and the current-value route in section 6 is often the only fast exit.
• The gap between the 80 and 78 percent dates widens as the down payment grows, from about 10 to 11 months at 3 percent down to about 16 to 20 months at 15 percent down. The schedule pays off principal faster later in the loan, but in a 15 percent down loan both lines are crossed early, when principal still moves slowly.

Shorter terms. On a 15-year loan the lines arrive much sooner. With the same $400,000 price: 10 percent down at 5.5 percent reaches 80 percent at payment 30 and 78 percent at payment 35; at 6.5 percent, payments 32 and 37. With 5 percent down at 6.5 percent, payments 43 and 48. The cost is a higher payment, $3,135.99 a month on $360,000 at 6.5 percent over 15 years compared with $2,275.44 over 30. Compare the payment trade-off on the mortgage calculator before treating a shorter term as a PMI strategy.

5. The conditions on a borrower request, and where they bite

Under 4902(a), the servicer must cancel PMI on the cancellation date or a later date when you meet all of these:

1. A written request. The statute says the borrower "submits a request in writing." A phone call starts nothing. Keep a copy and note the date you sent it.
2. A good payment history. Section 4901 defines it two ways. No payment 30 or more days late in the 12 months before the later of the cancellation date or the request date, and no payment 60 or more days late in the 12-month period that began 24 months before that date. In plain terms: nothing 30 days late in the last year, and nothing 60 days late in the year before that.
3. Current on payments when you ask.
4. Value evidence. You must show the property's value "has not declined below the original value," using evidence of a type the servicer set in advance and told you about. In practice this is often a broker price opinion or appraisal, and it is normally at your cost.
5. No subordinate lien. You certify that your equity is not encumbered by a second mortgage, home equity loan or HELOC.

Where each one fails in real life.

• A late payment 11 months ago. A single 30-day late inside the 12-month window blocks the request until the window clears. If you have the payment number from the table above, count forward from the late month before writing.
• A HELOC opened for a renovation. Condition 5 is binary. Paying the HELOC down is not enough; the certification is about whether a subordinate lien exists.
• A falling local market. The test is not whether you have 20 percent equity today. It is whether value has held at or above original value. If a valuation comes in at $390,000 on a $400,000 original value, the request can be refused even at a 79.9 percent balance. Fannie Mae's guide lets the servicer deny the request in that situation unless the borrower pays the balance down far enough to meet the threshold against the lower value.
• Asking before the line. A request dated a month before the balance crosses 80 percent is not a valid trigger. Request on or after the cancellation date.

Once a request qualifies, 4902(e) bars the servicer from requiring premiums more than 30 days after the later of your request or the date you met the value and lien conditions, and 4902(f) requires any unearned premium to be returned within 45 days.

6. Removal based on today's value: the Fannie Mae route

The HPA tests use original value. Appreciation does not count. If Fannie Mae or Freddie Mac owns your loan, its servicing rules also apply, and the CFPB notes those rules can be more favorable than the HPA but cannot be less favorable.

Fannie Mae's Servicing Guide, section B-8.1-04, Termination of Conventional Mortgage Insurance (checked October 2026), allows a borrower-initiated termination based on current value with these limits for a one-unit principal residence or second home:

Current value must come from a valuation with an interior and exterior inspection, and the payment record test is the same one Fannie uses for original-value requests: current at the time of the request, nothing 30 or more days late in the last 12 months, and nothing 60 or more days late in the last 24 months. Fannie's wording and the statute's two windows come to the same thing, because a payment 60 days late inside the last 12 months is also 30 days late. The guide treats renovations that substantially improve marketability, such as kitchen or bathroom renovations or added square footage, as improvements, and says maintenance repairs are not. For one- to four-unit investment properties and two- to four-unit principal residences, Fannie uses 70 percent and more than 2 years of seasoning. Expect to start this route yourself: it is a borrower-initiated request, not something the servicer runs on a schedule.

Freddie Mac publishes its own rules in its Single-Family Seller/Servicer Guide, chapter 8203. This guide did not verify the Freddie Mac thresholds for loans covered by the HPA, so it does not state them; if your loan is owned by Freddie Mac, ask your servicer for the current-value requirements in writing. Your servicer can tell you which investor owns the loan.

Worked example on current value. Same loan as section 2. After payment 36 (3 years of seasoning) the balance is $347,102.07. To reach 75 percent on current value the home would have to be worth at least $347,102.07 / 0.75 = $462,802.76. If an interior and exterior valuation came in at $470,000, the LTV would be 73.85 percent, under the 75 percent limit, and the borrower could request termination roughly five years before the original-value request date. At payment 61, now past five years, the limit relaxes to 80 percent and the balance of $336,549.49 needs a value of $420,686.86 or more.

Common trap: the five-year step. At exactly 2 to 5 years the limit is 75 percent, not 80. A borrower at 78 percent LTV on a fresh appraisal in year 4 does not qualify; the same borrower qualifies the month the loan passes 5 years of seasoning if the value holds.

7. How the PMI Elimination Calculator models this

The PMI Elimination Calculator takes a home value, a loan balance, a rate, a monthly PMI amount, a monthly extra payment, an annual appreciation rate, and a target LTV. It computes a 30-year payment on the balance you enter, steps the balance forward month by month with your extra payment, grows the value by your appreciation rate, and stops the month the balance divided by value reaches your target. It then compares that month with a baseline that has no extra payment and no appreciation.

That design maps onto the rules in two different ways, depending on how you set appreciation.

Appreciation at 0 percent reproduces the HPA original-value test. Enter the original value as the home value, the original loan amount as the balance, and 80 as the target. For the section 2 loan ($400,000, $360,000, 6.5 percent), the calculator's baseline lands on payment 95, matching the schedule above. Set the target to 78 and the baseline lands on payment 109. Adding $200 of extra payment moves the 80 percent month to payment 64, the same result as the table in section 3. Remember that only the request date moves.

Appreciation above 0 percent is a current-value scenario. That is Fannie Mae policy, not the HPA. Set the target to 75 if the result lands between 2 and 5 years, because that is the limit in that window, and treat anything under 24 months as not eligible unless you have substantial improvements. With the calculator's own default inputs ($450,000 value, $410,000 balance, 6.5 percent, $200 extra, 3 percent appreciation), an 80 percent target returns month 33, which is in the 2-to-5-year window where 80 percent does not apply. A 75 percent target returns month 48, at a projected value of about $507,000 and balance of about $379,000, which is the more realistic reading. Any current-value result also needs a valuation to confirm the value, which the calculator cannot do.

One limitation to keep in mind. The calculator amortizes whatever balance you enter over a fresh 360 months. For a loan you are already several years into, the real payment is higher than that, so the calculator's dates will run somewhat later than your actual schedule. For an existing loan, the closest answer comes from entering the original figures and counting from your first payment date.

8. FHA loans: MIP is a different system

FHA loans carry a mortgage insurance premium (MIP) set by HUD, and the HPA cancellation rules above do not apply to them. HUD's Mortgagee Letter 2023-05 (checked October 2026) set the current annual MIP schedule for forward mortgages with case numbers endorsed on or after March 20, 2023, for incorporation into HUD Handbook 4000.1. It keeps the upfront premium at 175 basis points (1.75 percent) of the base loan amount. For a mortgage term of more than 15 years, the annual premium and its duration depend on the loan-to-value ratio at origination:

For terms of 15 years or less, the letter sets 0.15 percent for 11 years at 90 percent LTV or less and 0.40 percent for the mortgage term above 90 percent at the lower loan amounts. The letter also moved the base loan amount threshold to the national conforming loan limit, so the $726,200 printed in the 2023 table is a 2023 figure; ask your lender for the threshold applied to your case number.

What that means in practice. An FHA buyer who puts 10 percent down on a $400,000 home has a 90 percent LTV and pays annual MIP for 11 years. A buyer who puts down 9.9 percent is above 90 percent and pays it for the life of the loan. The boundary is that sharp.

A scale check, labelled as an approximation. On a $400,000 purchase with a 3.5 percent down payment (an input for this example, not a program statement), the base loan is $386,000 and the LTV is 96.5 percent. The upfront premium is $386,000 x 1.75% = $6,755, which if financed brings the loan to $392,755. The annual premium is 0.55 percent for the mortgage term; on the $386,000 base loan, 0.55 percent is about $2,123 a year, or roughly $177 a month in the first year. HUD's actual monthly figure is computed by the servicer on its own balance convention and falls slowly as the balance does.

Older FHA loans. HUD's mortgage insurance premium page (checked October 2026) says monthly premiums could be cancelled early for some cases where the balance reaches 78 percent or less, but only where the loan closed after December 31, 2000 and the case number was assigned before June 3, 2013. If your FHA loan predates June 3, 2013, ask your servicer which rule applies to your case.

9. The refinance route out of life-of-loan MIP or high PMI

For an FHA borrower paying MIP for the mortgage term, the usual exit is refinancing into a conventional loan at or below 80 percent of the new appraised value, so the new loan needs no PMI at all. The HPA definition of original value supports that logic on the conventional side: after a refinance, original value is the appraised value used to approve the refinance, so a higher appraisal resets the base for every later 80 and 78 percent calculation.

Illustration with stated inputs. Suppose an FHA loan has a $340,000 balance and the home appraises at $440,000 at refinance. $340,000 / $440,000 is 77.3 percent, under 80 percent, so a conventional refinance of $340,000 would sit below the usual PMI line. If the new loan were $360,000 because closing costs were rolled in, the LTV would be 81.8 percent and PMI could apply again, with the new 80 percent line at $352,000.

A refinance is a trade, not a free exit. It replaces your rate, restarts an amortization schedule, and carries closing costs. Whether it pays depends on the MIP you stop paying, the rate difference, and how long you keep the loan. Run both payments on the mortgage calculator and compare the total over the years you expect to stay.

10. VA and USDA loans

VA-backed loans do not carry monthly mortgage insurance. The VA's funding fee and closing costs page (checked October 2026) says the program "doesn't require down payments or monthly mortgage insurance" and charges a one-time funding fee instead. For purchase loans, the fee is 2.15 percent of the loan amount for first use with less than 5 percent down (3.3 percent after first use), 1.5 percent with 5 percent or more down, and 1.25 percent with 10 percent or more down. Some borrowers are exempt. There is nothing to cancel later.

USDA guaranteed loans have their own fee structure set by USDA Rural Development. This guide did not verify current USDA fee rates, so it does not state them; ask the lender for the figures in your conditional commitment.

11. Edge cases where the simple answer breaks

Adjustable-rate loans. For an ARM, the HPA measures the 80 and 78 percent dates against the amortization schedule then in effect, so each rate reset can move them. A rate increase slows principal paydown and pushes both dates later.

Loan modifications. Under 4902(d), if you and the lender modify the loan, the cancellation, termination and final termination dates are recalculated on the modified terms.

Behind on the termination date. If you are not current when the 78 percent date arrives, PMI ends on the first day of the first month after you become current, not on the original date. Midpoint termination also requires being current.

High-risk loans. Section 4902(g) excludes loans that were high-risk at closing from the request and automatic rules. For loans within the conforming loan limit, high risk is defined by Fannie Mae and Freddie Mac guidelines; for other loans, the lender decides. For those loans PMI still cannot be required past the first day of the month after the midpoint, if you are current. On a 30-year loan that is month 181. For the section 2 example, a high-risk designation would mean 72 more months of premiums than the 78 percent date at payment 109.

Lender-paid mortgage insurance. The CFPB notes that loans where the lender pays the mortgage insurance follow different rules. There is no monthly PMI line to cancel; the cost is usually built into the rate, and only a refinance or payoff removes it.

Not your principal residence. The HPA covers principal residences. A second home or rental falls under investor rules instead; Fannie Mae, for example, uses 70 percent for investment properties.

The purchase price was below the appraisal. Original value is the lower of the two. A buyer who paid $400,000 for a home that appraised at $415,000 measures against $400,000, so the cancellation date does not move earlier.

12. Common mistakes

1. Counting on prepayments to trigger automatic removal. They do not. Write once your actual balance crosses 80 percent.
2. Measuring against an online value estimate. HPA requests use original value. Today's value matters only through an investor's current-value program, and only after a valuation the servicer orders.
3. Ignoring the payment-history window. One 30-day late in the past 12 months resets the clock on a request.
4. Forgetting the HELOC. A subordinate lien blocks the request outright.
5. Assuming the FHA rules match conventional. On a 30-year FHA loan, 10 percent or more down at origination (90 percent LTV or less) means annual MIP for 11 years; less than 10 percent down means MIP for the mortgage term, unless you refinance out.
6. Requesting a current-value removal at 80 percent in year 3. In Fannie Mae's guide the 2-to-5-year limit is 75 percent.
7. Not checking the refund. Unearned premiums must be returned within 45 days of cancellation or termination. Compare the next escrow statement with the old one.

13. A request checklist

• Find the PMI disclosure from closing and confirm the scheduled 80 percent date.
• Divide your current principal balance by original value (the lower of price or appraisal at closing).
• Check the last 24 months of payments for any 30-day or 60-day late.
• Confirm there is no second mortgage, home equity loan or HELOC.
• Ask the servicer, in writing, which investor owns the loan and what valuation it requires and at what cost.
• Send a dated written request on or after the date the balance reaches 80 percent.
• Watch for the premium to drop off within 30 days of qualifying and any refund within 45 days.

Sources

• 12 U.S.C. 4901, definitions (Cornell LII): https://www.law.cornell.edu/uscode/text/12/4901 (checked October 21, 2026)
• 12 U.S.C. 4902, termination of private mortgage insurance (Cornell LII): https://www.law.cornell.edu/uscode/text/12/4902 (checked October 21, 2026)
• CFPB, When can I remove private mortgage insurance (PMI) from my loan?: https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/ (checked October 21, 2026)
• Fannie Mae Servicing Guide B-8.1-04, Termination of Conventional Mortgage Insurance: https://servicing-guide.fanniemae.com/svc/b-8.1-04/termination-conventional-mortgage-insurance (checked October 21, 2026)
• HUD Mortgagee Letter 2023-05, Reduction of FHA Annual MIP Rates: https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf (checked October 21, 2026)
• HUD, Single Family Mortgage Insurance Premiums: https://www.hud.gov/hud-partners/housing-mip (checked October 21, 2026)
• U.S. Department of Veterans Affairs, VA funding fee and loan closing costs: https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/ (checked October 21, 2026)

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