Your lender will not remind you. Here is when PMI must end by law, and the three ways to end it sooner.
Private mortgage insurance protects the lender — not you — when you put down less than 20% on a conventional loan. It typically costs 0.3% to 1.5% of the loan balance per year, folded into your monthly payment. On a $360,000 loan that's roughly $90 to $450 a month, with most borrowers landing between $150 and $250.
PMI isn't evil — it's the price of buying years earlier than a 20% down payment would allow. But paying it one month longer than necessary is a donation to your lender. Here's how it ends.
Under the Homeowners Protection Act, PMI on a conventional loan must be cancelled automatically when your balance reaches 78% of the home's original value, as long as you're current on payments. Earlier than that, you can request cancellation at 80% — the lender won't volunteer this; you have to ask, usually with a short written request.
The catch in both cases: "original value" means the price when you bought (or the appraisal at closing). Appreciation since then doesn't count for these two paths — but it does for the next one.
1. Pay down the balance. Extra principal payments pull the 80% date forward, sometimes by years — see exactly how fast with the extra payment calculator.
2. Use appreciation + a new appraisal. If your home's current market value puts your loan at or below 80% (many lenders want 75% if you're relying on appreciation alone), you can request removal based on a fresh appraisal you pay for (~$500–700). Two years of typical appreciation often gets you there long before your payments do.
3. Refinance. If rates cooperate and your new loan is at or below 80% of current value, PMI disappears with the old loan. Whether the refi itself makes sense is a separate question — run the break-even math honestly, including closing costs.
FHA's version (MIP) usually cannot be cancelled at 80% — with less than 10% down, it lasts the life of the loan. The standard escape is refinancing into a conventional loan once you have 20% equity. If you have an FHA loan and decent equity, that single move often pays for itself within a year or two — again, verify with the refinance calculator.
Bottom line: know your original value, watch for the 80% line, and don't wait for 78% to arrive on its own if appreciation or a few extra payments can get you out earlier.
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