Suppose your servicer bills you $135 a month in private mortgage insurance on a $320,000 balance, and you bought the house at $400,000. That balance is exactly 80% of the original value, so you have the right to ask for cancellation. The charge keeps coming anyway: $1,620 a year, $8,100 over five years. A written request costs nothing. Even if the servicer wants a $500 appraisal (an assumed figure), the fee pays for itself in month 4. This guide from Duane Buziak, NMLS #1110647, shows you how to tell whether you are paying PMI every month unnecessarily and which route fits: request cancellation, appraisal-based removal, or refinance. Have your latest mortgage statement, your original purchase price and appraisal if you have them, and a rough idea of today’s home value.
- Step 1: Confirm the PMI Is Conventional PMI and Find Your Exact Monthly Cost
- Step 2: Calculate Your Real Loan-to-Value Using Your Original Value
- Step 3: Check Whether Extra Payments, Appreciation, or Improvements Change Your Timeline
- Step 4: Request Cancellation in Writing If You Have Reached 80% LTV
- Step 5: Order an Appraisal-Based Removal If Your Home Value Has Risen
- Step 6: Compare Refinancing to Drop PMI With Staying Put
- Step 7: Confirm the PMI Is Gone and Recover Any Overpayments
- Questions People Ask About Removing PMI
- Running the Check Before Another Payment Goes Out
Step 1: Confirm the PMI Is Conventional PMI and Find Your Exact Monthly Cost
Open your latest statement and look for a line labeled mortgage insurance, PMI, or MI. It may sit in the payment breakdown or in the escrow section. Write down the monthly amount and confirm the loan type (conventional, FHA, VA, USDA) printed on the statement or your closing documents.
Then rule out the look-alikes, because the removal path depends on which one you have:
- FHA loans charge MIP, not PMI. Depending on your down payment and case number date, MIP can last 11 years or the full life of the loan. Check the rules on hud.gov. Steps 2 through 5 below do not apply to FHA MIP the way they do to conventional PMI.
- VA loans have no monthly mortgage insurance at all. They carry a one-time funding fee instead, per va.gov. If a VA statement shows an insurance line, it is probably homeowners insurance, so read the label.
Next, find out whether your PMI is borrower-paid or lender-paid. Borrower-paid PMI shows up as a separate monthly charge. Lender-paid PMI is built into a higher interest rate, so there is no line item to cancel. The only way to remove it is a refinance, which is covered in Step 6. If you cannot tell, ask your servicer which type your loan carries.
Mistake to avoid: assuming PMI will drop off the moment you hit 20% equity. Automatic termination happens later than that, and the 80% milestone only gives you the right to ask.
Step 2: Calculate Your Real Loan-to-Value Using Your Original Value
Loan-to-value (LTV) is your current principal balance divided by the home’s value. For the federal Homeowners Protection Act (HPA), “value” means your original value: the lesser of the purchase price or the appraised value at closing. Today’s market value does not count here.
The HPA sets three milestones, summarized by the Consumer Financial Protection Bureau:
- 80% LTV: you may request cancellation in writing.
- 78% LTV: PMI terminates automatically based on the original amortization schedule, if you are current on payments.
- Midpoint of the loan term: final termination (month 181 on a 30-year loan) if you are current, even if you never reached 78%.
Here is the math with a $400,000 original value, which is the lesser of purchase price and appraisal. The last row shows why current market value is a separate calculation, used for the appraisal route and refinancing.
| Scenario | Balance | Value Used | LTV | Threshold Reached |
|---|---|---|---|---|
| Early in the loan | $335,000 | $400,000 original | 83.8% | None yet |
| Request point | $320,000 | $400,000 original | 80.0% | Right to request cancellation |
| Automatic point | $312,000 | $400,000 original | 78.0% | Automatic termination |
| Same $320,000 balance, home now worth $450,000 | $320,000 | $450,000 market | 71.1% | Appraisal-based policy only |
Divide your balance by your original value and compare the result to the table. If you land at 80% or below, go to Step 4. If you are above 80%, continue to Step 3.
Step 3: Check Whether Extra Payments, Appreciation, or Improvements Change Your Timeline
Extra principal payments pull the 80% date forward. Suppose a $340,000 loan at 6.5% on a $400,000 original value, now at a $335,000 balance. You need about $15,000 more in principal reduction to reach $320,000. On the regular schedule that takes roughly 40 months. Adding $200 a month toward principal cuts it to roughly 26 months, about 14 months sooner. That also saves about $1,890 in PMI at $135 a month. These are illustrative figures, so run your own with your servicer’s amortization schedule.
Make sure extra payments are applied to principal. Many servicers need that written on the payment or selected in the online portal.
Appreciation and improvements follow a different set of rules. Servicers and investors apply their own guidelines for value-based removal, usually the Fannie Mae Servicing Guide or Freddie Mac’s equivalent. As of 2026, those guidelines have commonly required seasoning of about two years for removal based on a new value, with a lower LTV cap (75%) if the loan is under five years old and 80% after five years. Improvements that raised the value are typically treated more favorably than market gains alone. Wording changes, so confirm the current version with your servicer.
Decision point: if your original-value LTV is still above 80% but the home has clearly appreciated, skip ahead to Step 5 or Step 6.
Mistake to avoid: counting a market-value jump toward your HPA request right. The HPA works from original value only. Appreciation helps only under the servicer or investor policy.
Step 4: Request Cancellation in Writing If You Have Reached 80% LTV
Call your servicer first and ask for their PMI cancellation requirements in writing. Then send a written request that includes your loan number, the date you reached 80% of original value, and a statement that you are asking for cancellation under the HPA.
The HPA conditions are specific, and the servicer will check each one:
- Good payment history: no payment 30 or more days late in the past 12 months, and none 60 or more days late in the past 24 months.
- No subordinate liens: a HELOC or second mortgage can block cancellation.
- No decline in value: the property must not have fallen below the original value.
The servicer may also ask for evidence that the property value has not declined, such as an appraisal or a broker price opinion. Ask who orders it, who pays, and what the turnaround time is before anything is scheduled. Get those answers in writing too.
If you are denied, ask for the specific reason in writing. If you meet the conditions and the servicer still refuses, or does not respond, submit a complaint at consumerfinance.gov, attaching your request letter and payment history. Keep copies of everything you send, with dates.
If you have a second lien, ask the lien holder whether it can be paid off or subordinated. Otherwise you may need the refinance route in Step 6.
Step 5: Order an Appraisal-Based Removal If Your Home Value Has Risen
This route fits when your balance is above 80% of the original value but at or below 80% of today’s appraised value. In the example above, a $450,000 appraisal against a $320,000 balance gives you a 71.1% LTV, well inside the limit.
Before paying for anything, ask the servicer for the exact appraisal requirements. Many require their own approved appraiser or management company, and a separate appraisal you ordered yourself may be rejected. Ask about the seasoning period, the maximum LTV they will accept, and whether any lien or payment-history conditions apply.
Then run the math. A full appraisal commonly costs a few hundred dollars, and the range varies by area and property, so get a local quote. Divide the cost by your monthly PMI. At $500 and $135 a month, break-even is about 3.7 months, so month 4. The savings after that are ongoing. If your PMI is only $40 a month, the same appraisal takes more than a year to pay back, and it may be smarter to wait for the 80% request date.
Mistake to avoid: ordering an appraisal before confirming seasoning and lien requirements. If your loan is too new or you have a second lien, you can pay for a report that the servicer will not accept.
Step 6: Compare Refinancing to Drop PMI With Staying Put
A refinance beats cancellation in three situations: you have lender-paid PMI, the servicer will not cancel, or today’s rate is lower than your current one, so the PMI savings and rate savings stack.
Here is a worked example. Suppose a $320,000 balance at 6.75% refinanced into a new 30-year loan at 6.25% (illustrative rates, not a quote). Principal and interest drop from about $2,076 to about $1,970, saving roughly $105 a month. Removing the $135 PMI brings the combined saving to about $240 a month. With assumed closing costs of $6,400, break-even is $6,400 divided by $240, or month 27. Over five years you save $14,400, and after closing costs the net is about $8,000. Restarting a 30-year term adds interest in later years, so factor in how long you plan to stay.
| Option | Monthly Change | Upfront Cost | 5-Year Effect | Break-Even |
|---|---|---|---|---|
| Keep PMI | $0 | $0 | Pay $8,100 in PMI | Not applicable |
| Request cancellation | Save $135 | $0 (assumed $500 if appraisal needed) | Save $8,100 (about $7,600 with appraisal) | Immediate, or month 4 with appraisal |
| Refinance to 6.25%, no PMI | Save about $240 | $6,400 assumed | Net savings of about $8,000 | Month 27 |
The equity rule: to refinance with no PMI on the new loan, you generally need at least 20% equity, meaning 80% LTV or lower. Conventional cash-out refinancing caps at 90% LTV and normally carries PMI above 80%, so do not treat a cash-out as a way to drop PMI.
For current rate context, check the Freddie Mac Primary Mortgage Market Survey, which publishes weekly averages. Rates move, so use the latest reading as of the day you run the numbers. Loan size matters too. As of 2026, the FHFA conforming loan limit is $832,750 for most of Virginia, including Henrico County. Northern Virginia counties such as Fairfax are at the higher-cost ceiling of $1,249,125. Confirm your county on the FHFA lookup.
Duane Buziak can run a soft-pull pre-qualification with no credit impact and compare options from hundreds of wholesale lenders. No-out-of-pocket closing options exist for some borrowers, usually through a trade-off in rate or lender credits, so ask for both versions and compare the break-even.
Step 7: Confirm the PMI Is Gone and Recover Any Overpayments
Check your next statement for the mortgage insurance line. If your payment includes escrow, request the updated escrow analysis as well, since insurance charges can sit there. Ask the servicer for written confirmation that PMI has been terminated and the date it took effect. A letter or secure-message confirmation is enough, and it protects you if the charge reappears.
Under the HPA, the servicer must return unearned premiums within 45 days after PMI terminates or is cancelled. See the CFPB’s PMI guidance and confirm the exact language for your situation. If the refund has not arrived by day 45, send a written follow-up with the termination date.
Then update your budget. Your new payment should be lower by the PMI amount. Consider setting up an automatic extra principal payment equal to the old $135. It keeps your cash flow unchanged and shortens the loan.
If PMI continues after the automatic termination date, send a written dispute that cites the 78% date or the midpoint, and include your payment history. If the servicer still does not fix it, escalate to the CFPB at consumerfinance.gov/complaint.
Questions People Ask About Removing PMI
How Do I Get Rid of PMI Without Refinancing?
Request cancellation in writing once your balance reaches 80% of the original value. If you have not reached that point but the home has appreciated, ask your servicer about appraisal-based removal.
At What LTV Does PMI Automatically Drop Off?
Automatic termination happens at 78% of original value on the amortization schedule, provided you are current. Final termination comes at the midpoint of the loan term.
Is It Worth Refinancing Just to Remove PMI?
Only if the break-even is reasonable. If you qualify to cancel for free, a refinance rarely makes sense for PMI alone. It makes more sense with lender-paid PMI or when a lower rate adds to the savings.
Can I Remove PMI If My Home Value Went Up?
Often yes, but under servicer and investor policy rather than the HPA. Expect an appraisal requirement and a seasoning period, which is commonly two years or more.
How Much Does a PMI Removal Appraisal Cost?
Typically a few hundred dollars, though it varies by location and property type. Ask the servicer who orders it and what they accept before you pay.
Does FHA MIP Cancel at 80% LTV?
Generally not. FHA MIP duration depends on your down payment and case number date, and many loans carry it for the life of the loan. Check the HUD guidelines for your case date.
Do VA Loans Have PMI?
No. VA loans have no monthly mortgage insurance. They carry a one-time funding fee, with exemptions for some borrowers.
Will Removing PMI Hurt My Credit Score?
A cancellation request is not a new loan application, so it does not involve a new loan inquiry. A refinance does include a credit check, though a soft-pull pre-qualification lets you see options first with no credit impact.
Do I Get a Refund After PMI Is Cancelled?
Yes, for unearned premiums. The HPA requires the servicer to refund them within 45 days of termination or cancellation.
Is Duane Buziak a mortgage broker or a mortgage lender?
Both. Duane Buziak is a mortgage broker who shops hundreds of wholesale lenders to find the right fit, and he also has lender capability with in-house and correspondent funding.
Running the Check Before Another Payment Goes Out
Run one test on your numbers: if your balance is at or below 80% of original value, send the written request this week. If it is above 80% and a refinance breaks even inside the time you will own the home, the refinance is worth pricing. Every month of waiting past either point costs you the full PMI amount.
Ready to discover how much you could save with Virginia’s top-ranked mortgage expert? Call (804) 212-8663 now for your free soft-pull rate analysis, with no credit impact and no obligation, and find out if refinancing can lower your monthly payments or unlock your home’s equity.