How to Get Rid of PMI: 4 Ways to Drop It Sooner

If you have a conventional loan and didn't start out with 20% equity in your home, there's a good chance part of your monthly payment goes to private mortgage insurance, or PMI. It protects the lender, not you. So it makes sense to ask: when can I stop paying it?

The good news is that conventional PMI doesn't last forever. Federal law gives you specific rights to remove it, and Fannie Mae and Freddie Mac allow some homeowners to drop it even earlier based on their home's current value. In September 2026, Fannie Mae also started letting loan servicers reach out to borrowers who might qualify. That makes this a good time to check where you stand.

Here's a plain-English look at how PMI removal works, what the rules require, and how FHA and VA loans compare.

What PMI is (and why you're paying it)

Lenders usually require PMI on a conventional loan when your loan-to-value ratio (LTV) is above 80%, meaning you have less than 20% equity at closing. PMI is what makes lower-equity conventional loans possible. It's often a smart trade-off for getting into a home sooner. Once you've built enough equity, though, it becomes a cost worth getting rid of.

A quick note on terms: PMI is for conventional loans. FHA loans have their own mortgage insurance premium (MIP), which follows different rules (more on that below).

4 ways to remove PMI on a conventional loan

At a glance

Method	When you qualify	Who starts it	Typical cost to you
1. Request at 80% of original value	Balance reaches 80% of original value (scheduled, or sooner with extra principal payments)	You, in writing	Possibly a valuation, if the servicer requires one
2. Automatic termination at 78%	Balance is scheduled to hit 78% of original value and you're current	Servicer (automatic)	None
3. Current-value removal	Usually 75% LTV or less after 2 to 5 years, or 80% or less after 5+ years, based on a new valuation	You (the servicer may now contact you)	Appraisal or BPO fee
4. Refinance	New loan at 80% LTV or less	You	Full refinance closing costs

1. Ask your servicer when you reach 80% of your home's original value

Under the federal Homeowners Protection Act, you can ask your servicer in writing to cancel PMI once your loan balance is scheduled to reach 80% of your home's original value. You can ask sooner if extra principal payments get you there. "Original value" generally means the lower of your purchase price or the appraised value when you bought (or the appraised value at your refinance, if you've refinanced).

According to the CFPB, your servicer must grant the request if you:

Make the request in writing
Have a good payment history and are current on your payments
Can certify there are no junior liens (such as a second mortgage or HELOC) on the home
Can show, if asked, that your home's value hasn't dropped below its original value (for example, with an appraisal)

Tip: The date you first become eligible should appear on the PMI disclosure you got at closing. If you can't find it, your servicer can tell you.

2. Let it end automatically at 78%

If you never ask, PMI should still end on its own. Your servicer generally has to cancel it automatically on the date your balance is scheduled to reach 78% of the original value, as long as you're current on payments. PMI also has to end the month after you reach the midpoint of your loan's amortization schedule (halfway through its original term), even if you haven't hit 78% yet.

Waiting works, but it's usually the slowest path.

3. Request removal based on your home's current value

This is the option many homeowners don't know about. If your home's value has gone up since you bought it, because of market appreciation, improvements you've made, or both, you may be able to remove PMI based on today's value instead of the original price.

For a one-unit primary residence or second home with a Fannie Mae or Freddie Mac loan, the general guidelines are:

How long you've had the loan	Maximum LTV based on current value
2 to 5 years	75% or less
More than 5 years	80% or less
Under 2 years, with substantial improvements that raised the value	80% or less

You'll also need a solid payment record. Fannie Mae's guide, for example, requires no payments 30+ days late in the last 12 months and none 60+ days late in the last 24 months. The servicer will typically order a valuation, such as an appraisal or broker price opinion, and you may have to pay for it.

"Substantial improvements" means projects that add real value, like a kitchen or bath renovation or added square footage. Routine repairs and maintenance don't count.

What's new in 2026: On September 16, 2026, at the direction of FHFA, Fannie Mae announced that servicers may now proactively contact borrowers whose loans may be close to the current-value LTV limits. Before that, Fannie Mae's rules barred servicers from soliciting these requests. Even so, removal is still started by you, the borrower. Don't wait for a letter. You can ask on your own.

Hypothetical illustration (LTV only): Suppose a home's original value was $400,000 and the loan balance today is $310,000. That balance is 77.5% of the original value, under the 80% mark. If a new valuation put the home at $440,000, the balance would be about 70% of current value. These figures are made up for illustration; actual eligibility depends on your loan, your investor's rules, and the valuation your servicer obtains.

4. Refinance into a loan without mortgage insurance

If your home has gained a lot of value, refinancing into a new conventional loan at 80% LTV or less is another way to drop PMI. It isn't always the right move, though. A refinance comes with closing costs and starts a new loan, and the new rate could be higher or lower than the one you have now. Compare the total cost, not just the monthly payment. If your main goal is lowering what you pay each month, a mortgage recast may also be worth a look. If a refinance does make sense, see our refinance options.

What about FHA and VA loans?

FHA loans: FHA mortgage insurance (MIP) doesn't follow the 80%/78% rules above. For FHA loans with case numbers assigned on or after June 3, 2013, HUD's rules are:

If your loan-to-value ratio at origination was 90% or less, annual MIP lasts 11 years (or until the loan is paid off, if sooner).
If your loan-to-value ratio at origination was above 90%, annual MIP generally lasts for the life of the loan.

For many FHA borrowers, refinancing into a conventional loan once they have enough equity is the most practical way to remove mortgage insurance. Learn more about FHA loans.

VA loans: VA purchase loans don't require PMI or monthly mortgage insurance. Most borrowers pay a one-time VA funding fee instead, and some veterans are exempt.

A quick PMI removal checklist

Find your PMI disclosure and your most recent mortgage statement.
Work out your LTV: loan balance ÷ original value (and ÷ an estimate of current value).
Check your payment history for the past 24 months.
Call your servicer and ask exactly what they require. Ask about valuation type, cost, and timing, and which investor owns your loan (Fannie Mae, Freddie Mac, or another), since the current-value rules depend on it.
Submit your request in writing and keep a copy.

Frequently asked questions

Can I get rid of PMI without refinancing?

Often, yes. On a conventional loan you can ask your servicer to cancel PMI once you reach 80% of the original value, or once you meet Fannie Mae or Freddie Mac current-value guidelines. Refinancing is just one option.

When does PMI automatically go away?

Your servicer generally must cancel it automatically when your balance is scheduled to reach 78% of the original value, as long as you're current. It must also end the month after the midpoint of your loan's amortization schedule.

Can I use a new appraisal to remove PMI?

Usually, yes, if your loan is owned by Fannie Mae or Freddie Mac. Current-value removal generally requires 75% LTV or less if you've had the loan 2 to 5 years, or 80% or less after 5 years, plus a clean recent payment history. Your servicer orders the valuation.

Does paying extra principal help remove PMI faster?

Yes. Extra principal payments lower your balance, which can move up the date you hit 80% of the original value. Check with your servicer first to make sure extra payments go toward principal.

How do I remove FHA mortgage insurance?

It depends on when your loan was originated and your loan-to-value ratio at origination. For most newer FHA loans that started above 90% LTV, MIP lasts for the life of the loan, so refinancing into a conventional loan is the usual way out. At 90% LTV or below, MIP generally ends after 11 years.

Is PMI tax-deductible?

Starting with the 2026 tax year, federal law (P.L. 119-21) again treats qualifying mortgage insurance premiums as deductible mortgage interest for people who itemize. The deduction shrinks above $100,000 of adjusted gross income and is gone above $109,000 ($54,500 if married filing separately). Talk to a tax professional about your situation.

Not sure where you stand? Let's look together.

PMI rules have a lot of fine print, and your options depend on your loan type, your equity, and your goals. Our licensed loan officers are happy to walk through your numbers with you. If refinancing could help, we'll show you real options side by side. If it won't, we'll tell you that too, with no pressure either way.

Schedule a quick call with our team, or send us a message. Prefer the phone? Call or text (215) 987-2602.

Sources

Any examples, rates, or payment amounts shown are for illustrative purposes only and may not reflect current market conditions.
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How to Get Rid of PMI (and Whether You Can Do It Sooner Than You Think)