How to Get PMI Cancelled on a Conventional Loan Under the HPA

The Quick Read: You can ask your servicer to cancel borrower-paid PMI once your balance is scheduled to reach 80% of the home’s original value, and federal law ends it automatically at 78% if you are current. The request route has conditions: a good payment history, no second liens, and no drop in value. Rising home values can also help, but that route runs on investor policy, not the statute.

It covers conventional loans only. FHA mortgage insurance follows different rules.

What Is PMI, and Why Can It Come Off?

PMI is private mortgage insurance. It protects the lender, not you, when you put down less than 20%. On conventional purchase loans, mortgage insurance is required above 80% loan-to-value (LTV), which is your loan balance divided by the home’s value.

Across the wholesale programs Lendmire places files with, a 97% LTV loan (3% down) is available for first-time buyers on a one-unit primary residence, and 95% LTV (5% down) for most other buyers. Those loans carry mortgage insurance by design. Published typical annual premiums run from 0.58% to 1.86% of the balance, which is a range, never a quote. Your actual cost depends on your file.

The good news is that this insurance is not permanent. Fannie Mae’s consumer guidance says as much in plain terms. The real question is how you get it off and when.

If you are still comparing loan structures, Lendmire’s conventional loan programs page lays out the leverage options that trigger PMI in the first place.

The Three Ways PMI Ends

PMI ends in three ways: you request cancellation at 80%, the servicer terminates it automatically at 78%, or it drops off at the loan’s midpoint. The Homeowners Protection Act (HPA) sets all three. Before it passed, cancelling PMI was at the lender’s discretion, per the OCC’s HelpWithMyBank page.

Request at 80%. You can ask the servicer to cancel on the date your balance is scheduled to fall to 80% of the home’s original value, per the CFPB. If extra payments bring you to 80% sooner, you can ask earlier.

Automatic at 78%. If you are current, PMI must end once your balance reaches 78% of original value on the original amortization schedule. If you are behind on that date, termination happens on the first day of the first month after you catch up.

Midpoint backstop. If you have not hit 78% by the halfway point of the loan term, such as year 15 of a 30-year loan, PMI ends then, if you are current. The CFPB notes this standard is more likely to matter on loans with an interest-only period, principal forbearance, or a balloon payment.

A misconception worth killing: PMI does not drop automatically at 80%. At 80% you earn the right to ask. Automatic comes at 78%, so call your servicer at 80% rather than waiting for it.

How Do You Calculate Your LTV for a PMI Request?

Your LTV for an HPA request uses original value, not today’s market price. Original value generally means the lower of the contract sales price or the appraised value at purchase. On a refinance, it is the appraised value at that refinance.

Picture a home bought with a 95% LTV loan. You borrowed 95% of the lower of price and appraisal. Your balance must fall to 80% of that same original number. Home price growth does not move the target. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.

Where do you find the date? Your PMI disclosure form from closing should list the first date you can request cancellation. If you can’t find it, call the servicer. The servicer is the company you send your mortgage payment to, and it may not be the lender who originated your loan.

Extra principal payments change the math in one direction. You may choose whether the LTV calculation uses the amortization schedule or your actual unpaid balance from real payments. So prepaying principal can pull your request date forward. It does not move the automatic 78% date, which runs on the scheduled balance.

Check Your Eligibility First

You qualify to request cancellation only if you pass four tests. The statute requires a written request, a good payment history, being current, and evidence that value has not declined plus certification that no subordinate lien exists.

Run this checklist before you call:

• Payment history. Fannie Mae defines it as current (prior month paid) with no payment 30 or more days late in the last 12 months. The OCC describes a similar test: no 60-day late in the past two years and no 30-day late in the past year. One 30-day late can reset your clock.
• No junior liens. A HELOC or second mortgage blocks cancellation. If you plan to open a HELOC, think about the timing. (Many borrowers learn this the hard way.)
• Loan type. Confirm your PMI is borrower-paid, on a conventional loan.
• Value. Be ready to show the home has not lost value since purchase.

How to Request Cancellation, Step by Step

Send a written request to your servicer, then confirm each step in writing. The statute speaks of written requests. Both Fannie Mae and Freddie Mac accept verbal ones, but a letter is the safest record.

1. Find your date. Use the PMI disclosure or compute from actual payments.

2. Identify the owner and servicer. The investor (often Fannie Mae or Freddie Mac) sets the value rules. The servicer, not your original broker, handles the request.

3. Write the request. State your loan number, say you are requesting cancellation of borrower-paid PMI under the HPA, note your LTV against original value, and certify there is no subordinate lien.

4. Ask what they need. The servicer may require evidence that value has not declined.

5. Follow up. Put a reminder on your calendar. Keep copies of everything and log each call.

If the servicer’s valuation check comes back at or above the original value, Fannie Mae’s guide has the servicer terminate the insurance and notify you, with timing varying by file and servicer. If it comes back lower, the servicer denies unless you pay the balance down enough to meet the LTV test.

When a Rising Home Value Gets You There

Current-value cancellation is not an HPA right. It is investor policy, and some servicers allow it under their own standards. For one-unit principal residences, Fannie Mae’s Servicing Guide sets these limits:

Improvements that count are typically renovations such as kitchen and bathroom work or added square footage. Repairs that keep the property maintained do not count. You give the servicer details on what you did since origination.

Expect a valuation. Fannie Mae has the servicer try an automated valuation first. If that produces no value, the servicer denies the request unless you choose to verify value through a broker price opinion (BPO) or appraisal. The BPO or appraisal is at your expense, and the servicer orders it after receiving the fee. The guide sets a fee schedule; think of it as a few hundred dollars, set by the guide.

Freddie Mac works similarly. When it requires a current-value check, the check is done at your expense, no later than 120 days after your request. It is an interior-and-exterior BPO, or an appraisal where law requires one or the servicer decides it is in your best interest.

Here is the practical risk. You spend money on a valuation, and if the number comes up short, you still have PMI. Before paying, ask the servicer what value it needs to see, and compare that against local sale prices you can find yourself.

This is a toss-up for many borrowers. Homes that gained value fast can clear the bar early. Flat or soft markets rarely do, and then waiting for the schedule costs less than a failed valuation.

Fannie Mae has also issued a lender letter allowing servicers to solicit borrowers who may be eligible for termination based on current value. If your servicer reaches out, treat it as an invitation, not a guarantee.

Where the Rules Break: Edge Cases

The standard path covers single-family principal residences. The HPA language the CFPB describes covers loans closed on or after July 29, 1999. Several situations fall outside it.

• Second homes, investment properties, and multi-unit properties. These fall outside the statutory automatic termination. The agencies extend borrower-requested cancellation to second homes. Occupancy decides the rest: on the wholesale conventional programs, a principal residence can reach 95% LTV on purchase, while a second home tops out at 90%.
• Two- to four-unit principal residences. These follow non-HPA agency tests, which are stricter. Freddie Mac’s original-value test is 65% or less. Fannie Mae’s current-value test is 70% or less with more than two years of seasoning.
• High-risk loans. The statute shows a 77% threshold on fixed-rate loans classified as high risk, in place of 78%. The statute leaves the definition to agency guidelines.
• Lender-paid mortgage insurance. The HPA’s cancellation rights apply to borrower-paid PMI. Lender-paid insurance is built into the loan’s pricing, and the usual exit is a refinance. Confirm the details of your loan with your servicer.
• FHA. FHA mortgage insurance is not PMI under the HPA. It is more complicated and may involve refinancing.
• Adjustable-rate loans. Freddie Mac uses the current amortization schedule after the most recent rate change.
• Loans not owned by Fannie Mae or Freddie Mac. Portfolio and jumbo loans follow their own investor and servicer rules plus the HPA.
• Modified loans and disasters. The statute gives loan modifications special treatment, and each agency guide has disaster provisions. Ask your servicer which apply. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.

Scheduled Versus Actual Balance

Extra payments speed up your request date but not your automatic date. Automatic termination at 78% runs on the original schedule. Think of two clocks. One tracks the paper schedule and never changes. The other tracks your real balance, and you can wind it forward.

Say you borrowed at 95% LTV and pay an extra amount toward principal each month. Your real balance may hit 80% of original value years before the schedule does. You can request cancellation as soon as the real balance qualifies, provided you meet the payment, lien, and value tests. Without the request, the paper clock would keep billing you. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.

What If the Servicer Says No?

Ask for the reason in writing. Fannie Mae requires the servicer to notify you and give the grounds for denial, including the results of any automated valuation, BPO, or appraisal used.

Servicers using Fannie Mae’s tool can order, cancel, and appeal a completed valuation, so ask whether an appeal is available. If you believe the servicer is not following the rules, you can file a complaint with the CFPB, which regulates mortgage servicers. Keep every letter and call note.

After Cancellation: Verify It

Confirm in writing that billing has stopped. Do not stop paying on your own once you think you have hit 80%. Premiums that accrued before cancellation remain owed, so make sure the servicer has actually processed it first.

Then check three things:

• Your next statement shows no mortgage insurance charge.
• Any premium paid after the effective date is refunded.
• If your loan has an escrow account, ask the servicer to re-run the escrow analysis.

Should You Refinance Instead?

Refinancing is one option, not the default. A refinance that gets your new LTV to 80% or below can end PMI. On the programs Lendmire places, a rate-and-term refinance on a one-unit primary residence can go to 95% LTV, with mortgage insurance above 80%, so getting under 80% is what matters. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.

The tradeoffs are real. A refinance resets “original value” to the new appraisal. It also brings closing costs and a new loan term. If you are already near 80% on the original schedule, waiting or requesting cancellation usually costs less than starting over. If you are far off and values have climbed, a refinance can make sense, but weigh the full costs on the Loan Estimate before deciding.

Which Path Fits You?

Key Terms Defined

HPA (Homeowners Protection Act). The federal law that sets when borrower-paid PMI can be cancelled and when it must end.

Original value. The lower of the purchase price or appraised value at purchase, or the appraisal at a refinance.

LTV (loan-to-value). Your loan balance divided by the home’s value, shown as a percentage.

Servicer. The company that collects your payments and handles your cancellation request.

BPO (broker price opinion). A real estate professional’s estimate of value, often used instead of a full appraisal.

Seasoning. How long you have held the loan, which affects current-value rules.

Subordinate lien. A second loan, such as a HELOC, that sits behind your first mortgage.

If you own a home with PMI, or you are buying one and want to see how a conventional loan’s mortgage insurance would eventually come off, Lendmire can help you compare the options and what each one asks of the file. Every program figure here is subject to lender guidelines and full file review, and nothing in this guide is a commitment to lend.

For your own numbers, request a scenario review with Lendmire.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. Fannie Mae – What to Know About PMI

2. OCC HelpWithMyBank – PMI removal

3. CFPB

4. Fannie Mae Servicing Guide B-8.1-04