How Do You Get Rid of PMI on a Conventional Loan?

You can get rid of PMI on a conventional loan two ways: ask your servicer to cancel it, or wait for it to end on its own. Asking is faster. It’s also the step most people never take, because nobody mails you a letter saying you’ve earned it.

PMI is private mortgage insurance, and it protects your lender, not you. It sits on your monthly bill until the rules let it go. Here’s when you can ask, when it ends without being asked, what your servicer is allowed to require, and the one call I’d make this week. Everything below reflects the rules as of October 13, 2026.

What does PMI do, and does it work the same on every loan?

PMI covers your lender if you stop paying. A lender asks for it on a conventional loan, meaning one that isn’t backed by FHA, VA, or USDA, when the down payment was smaller than the lender wants to see. You pay the premium, usually as part of your monthly payment.

Not every loan works the same way. The rules in this article are for borrower-paid PMI on a conventional loan. FHA charges its own kind of mortgage insurance, and I cover that near the end.

One term you’ll see a lot: your servicer is the company you send your payment to. It isn’t always the lender who made the loan. The servicer is who you ask.

How do you get rid of PMI by asking your servicer to cancel it?

You send a written request once your loan balance has reached 80% of your home’s original value and you pass the payment-history test. Two sources set this up. The Homeowners Protection Act, 12 U.S.C. 4902, is the federal law, and Fannie Mae’s Servicing Guide topic B-8.1-04 spells out how its loans are handled.

“Original value” matters more than most people realize. It’s the lesser of the price you paid or the appraised value when you closed. It is not what the house is worth today. On a refinance, it’s the appraised value the lender used to approve that loan.

To qualify, here’s what your servicer is looking for:

• You’re current. The prior month’s payment has been made.
• A clean recent record. Under Fannie Mae’s guide, no payment 30 or more days late in the last 12 months and none 60 or more days late in the last 24 months.
• No second lien. The law lets your servicer ask you to certify that no second mortgage or home equity line sits behind your first loan.
• No drop in value. Your servicer has to see that the home hasn’t fallen below its original value.

Here’s the part that matters. You don’t have to wait for the calendar. The law counts the date your balance is scheduled to hit 80%, or the date your actual payments get it there. Extra principal payments pull that date forward. If you’re close, that’s the cheapest way to speed things up.

What happens when the servicer checks your home’s value?

On a Fannie Mae loan, the servicer first pulls an automated value, which is a computer estimate rather than an inspection. If that value is at least your original value, the servicer ends the insurance and has to notify you within 30 days. If it comes back lower, or doesn’t come back at all, the request is denied unless you pay the balance down or order a broker price opinion or an appraisal.

A broker price opinion, or BPO, is a real estate professional’s estimate of value. Under Fannie Mae’s guide, topic F-1-02 dated May 13, 2026, you pay for it. Ask your servicer for the current fee before you order anything, because servicers can charge differently.

Can you cancel PMI because your home went up in value?

Yes, on a loan Fannie Mae owns, but with a waiting period and a lower line. Your servicer can’t offer this to you. You have to ask for it.

For a one-unit home you live in or use as a second home, the rules work like this under Fannie Mae’s B-8.1-04:

• With the loan between two and five years old, your balance needs to be 75% or less of the home’s current value.
• With the loan more than five years old, the line is 80% of current value.
• The servicer orders an interior and exterior valuation, and you cover the cost.

There’s one exception to the two-year minimum. If you’ve made improvements that raised the value, such as a kitchen or bathroom remodel or added square footage, you can document them and ask earlier at the 80% line. Routine repairs don’t count. Keep your receipts and permits.

I’d do one thing before you spend money on a valuation: look at recent sales near you. Values don’t move together across the Grand Strand, and a condo and a single-family home a few miles apart can tell different stories. If the sales say you’re close, order it. If they say you’re not, wait.

Fannie Mae’s numbers are the ones I’ve verified here. Freddie Mac publishes its own cancellation rules, and I wouldn’t assume they match. Ask your servicer whether Fannie Mae or Freddie Mac owns your loan, because the owner’s rules set the details.

Does PMI end on its own, and when?

Yes. On a conventional loan covered by the Homeowners Protection Act, PMI ends automatically when your scheduled balance reaches 78% of the original value, as long as you’re current. “Scheduled” means the amortization schedule, which is the payment-by-payment plan, set at closing, that shows how your balance shrinks. Extra payments don’t speed up the automatic date. Only the request path does that.

There’s a backstop too. PMI can’t be required past the first day of the month after the midpoint of your loan’s scheduled life, as long as you’re current. If you’re behind on the date it should end, it ends the first of the month after you catch up.

Three more rules protect you:

• Once PMI ends, your servicer can’t keep charging it. Under Fannie Mae’s guide, it stops collecting no later than 30 days after the later of your request and the date you meet the requirements.
• Any unearned premium has to come back to you within 45 days.
• Your servicer has to send you a yearly notice of your right to cancel, with a contact number.

If you bought the home as an investment property, the lines are stricter. Fannie Mae’s cancellation threshold is 70% for an investment property or for a two-to-four-unit home you live in, and automatic termination happens only at the midpoint. Know which category your loan sits in.

Is it different on an FHA loan, or when the lender pays the insurance?

Usually, yes. FHA charges a mortgage insurance premium, or MIP, that follows different rules than PMI. For loans with FHA case numbers assigned on or after June 3, 2013, HUD Mortgagee Letter 2013-04 ended the old automatic drop-off at 78%. For many recent FHA loans the premium doesn’t come off the way PMI does, and the way out for many borrowers is to refinance into a conventional loan once they have enough equity.

If your lender paid the mortgage insurance instead of you, the CFPB says different rules apply. The answer will be in your closing paperwork and with your servicer.

Here’s the honest part. Refinancing just to shed insurance costs money in closing costs, and sometimes the better move is to keep the loan you have and cancel the PMI the way I described above. I’ll tell you if the math doesn’t work.

What should you do this week?

Call your servicer or log in to your account, and ask four things: who owns your loan, what original value they have on file, whether they show a cancellation date for your PMI, and exactly what they require in writing. That one call tells you whether you’re a month away or years away.

If the answer is “not yet,” write the date down. If you’re close and weighing a refinance against waiting, I’ll run both side by side. You can read about refinance options first, or contact me with your servicer’s answers and I’ll tell you what I’d do.

Frequently Asked Questions

At what point can I ask to remove PMI?

Once your loan balance reaches 80% of your home’s original value and you meet the payment-history rules, you can request cancellation in writing. On a loan Fannie Mae owns, you can also ask based on today’s value after a waiting period, at a lower threshold.

Does PMI go away automatically?

Yes, in most cases. On a conventional loan covered by the Homeowners Protection Act, PMI ends when your scheduled balance reaches 78% of the original value, if you’re current. It also ends after the midpoint of your loan’s scheduled life if you’re current.

Do I need a new appraisal to cancel PMI?

Not always. Your servicer usually checks value on its own first. If that check comes back lower than your original value or returns no value, you can pay for a broker price opinion or an appraisal.

Can I get rid of FHA mortgage insurance the same way?

Usually not. FHA uses a different premium with different rules, and for many recent loans it doesn’t drop off automatically. Many borrowers refinance into a conventional loan once they have enough equity.

About Travis Buis

Travis Buis is a loan officer with Elite Home Lending serving Myrtle Beach and the Grand Strand, working with buyers and homeowners across Horry and Georgetown counties. He handles purchase, refinance, and investment financing, and spends a fair amount of his week on the questions homeowners ask after closing — mortgage insurance, refinancing, and what to do with the equity they’ve built. His approach is to explain the mechanics first so you can make the call yourself, then handle the loan once you have. Get in touch.

Travis Buis, NMLS #1711446. Elite Home Lending, LLC — NMLS #2788023. Equal Housing Opportunity.

This article is for educational purposes only and is not a commitment to lend or an offer of credit. Program terms, rates, and eligibility standards are set by lenders, investors, and agencies and are subject to change without notice. Loan approval is subject to underwriting, credit approval, and property eligibility. Calculator results are estimates only. Nothing here is tax or legal advice — consult your CPA or attorney for your situation.