The Quick Read: On most conventional loans, private mortgage insurance (PMI) is tracked against the value of your home on the day you bought it, not against a new appraisal. A fresh appraisal matters only if you ask to cancel PMI early on the “current value” route, and the servicer sets the rules for that route. To check your own loan, find your original value in your closing papers, then ask your servicer which route applies.
Key Takeaways
- PMI can be tied to value in three ways: at the start of the loan, on the original-value schedule, and on a current-value request.
- The automatic end date runs on original value and your payment schedule. Home price growth does not move it.
- A new appraisal helps only when the servicer accepts it and orders it through its own process.
- Your loan’s owner, your occupancy, your loan’s age, your payment history, and any second liens all shape the answer.
- A quick call to the servicer, before you pay for any appraisal, is a more affordable first step.
Two Meanings of “Uses Appraised Value”
PMI touches appraised value at two different moments, and people blur them. At the start of the loan, the appraisal helps decide whether you need PMI at all. Years later, value decides when PMI can stop. Same word, different job.
Conventional payment estimate
The starting figures are an example price at the first-time buyer’s minimum down payment. Replace them with yours.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a conventional loan quote.
Estimate seeded at the low end of Fannie Mae’s published range (0.58%–1.86% a year); the insurer prices the actual premium on the score and the leverage. Applies only above 80% loan-to-value.
Illustrative starting assumptions: a $350,000 price, the first-time buyer’s minimum down payment, a thirty-year term at the current Freddie Mac benchmark, mortgage insurance at the low end of Fannie Mae’s published range, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a conventional loan quote; your rate is set by the lender at lock. The mortgage insurance figure is an editable estimate seeded from Fannie Mae’s published typical range, not a premium quote; the insurer prices the actual premium, and the cancellation month assumes scheduled payments with no extra principal and no change in value. Taxes, insurance and dues are editable estimates; closing costs are not included. Conforming loan limits apply by county. Licensed in sixteen states for consumer mortgages.
At the start. When you buy, the lender measures your loan-to-value ratio (LTV), which is the loan balance divided by the home’s value. For a purchase, the value used is generally the lower of the price you paid or the appraised value. If the appraisal matches the price, nothing changes. If it comes in low, your LTV is higher than you planned.
Across the wholesale programs Lendmire places files with, mortgage insurance is required above 80% LTV. Standard purchase loans on a principal residence reach 95% LTV. Buyers with a first-time-buyer program can reach 97%. That is why the appraisal matters on day one: it can push you over a line. For a fuller look at this stage, see Lendmire’s piece Is PMI on a Conventional Loan Based on Appraised Value?. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Later on. Once PMI is in place, the question becomes how it ends. You can request cancellation at 80% of the original value. The servicer must end it automatically at 78%. Both tests use a baseline set at purchase. That is how conventional loan programs are designed to work, and it is the reason a home that has gained value does not shed PMI on its own.
Which one are you asking about? If it is the first, you are looking at a purchase file. If it is the second, keep reading.
Key Terms Defined
Original value: The value your loan is measured against at the start. On a purchase, it is the lower of the price or the appraisal. If you later refinance, the new appraisal usually becomes the new original value.
Current value: What the home is worth today, as shown by a valuation the servicer accepts. It is used only on a current-value cancellation request.
Servicer: The company you send payments to. It handles PMI cancellation requests. It may not be the company that made the loan.
Seasoning: How long you have held the loan. Current-value requests usually ask for a minimum age, and younger loans face a stricter LTV test.
Amortization midpoint: The halfway point of the loan term. On a 30-year loan, that is after 15 years.
BPO (broker price opinion): A less formal value estimate from a licensed professional who views the home. Servicers often order one in place of a full appraisal.
Which Value Applies at Each Stage
Original value runs the default track. Current value applies only when you ask and qualify. The table shows who acts at each stage.
| Stage | Value used | Who acts |
|---|---|---|
| Buying the home | Lower of price or appraisal | Lender |
| Request at 80% | Original value (with a no-decline check) | You, then servicer |
| Automatic end at 78% | Original value, scheduled balance | Servicer |
| Final end at midpoint | None (loan age only) | Servicer |
| Early request on current value | New valuation | You, then servicer |
| After a refinance | New appraisal becomes the baseline | New lender |
Notice that only one row lets today’s market value do the work. Everything else is anchored in the past.
How to Check Your Own Loan, Step by Step
You can answer this in an afternoon with a few documents and one phone call. Here is the order that works.
Step 1: Find out who owns your loan. The rules below cover borrower-paid mortgage insurance on loans owned or backed by Fannie Mae or Freddie Mac. Most conventional loans on a home you live in fall here. Loans held in a lender’s own portfolio, and many jumbo loans, can follow different investor rules. The federal baseline still applies, but your servicer can tell you more.
Step 2: Pull your closing papers. At closing you should have received a PMI disclosure with projected dates for the 80% request and the 78% automatic end. Find it. Then find the appraisal report and the purchase contract. Compare the price with the appraised value. The lower of the two is typically your original value.
Step 3: Confirm the PMI is borrower-paid. Some loans carry lender-paid mortgage insurance, which is built into the loan’s terms and works differently. Your closing documents say which type you have. If PMI is not a separate line on your monthly bill, ask.
Step 4: Do the math on original value. Divide your current balance by your original value. If you are at or below 80%, you may be eligible to request cancellation. The Consumer Financial Protection Bureau explains that servicers must end PMI automatically once the balance is scheduled to reach 78% of original value, as long as you are current. It must also end the month after the loan’s amortization midpoint, even if 78% has not been reached.
Step 5: Ask the servicer which route applies. Ask whether your loan is on the original-value route or the current-value route. Ask what the servicer needs from you. A written request leaves a record, and verbal requests are also accepted under the agency rules, per Fannie Mae’s Lender Letter LL-2018-03.
Step 6: Hold the appraisal. Do not order your own. Servicers typically order the valuation themselves through the investor’s system, so a report you paid for on your own may not be used. Ask first.
One more fact helps. Fannie Mae’s Servicing Guide section B-8.1-04 measures your payment history backward from the later of the 80% date or the day you ask. So a clean recent record matters.
The Original-Value Route and the Current-Value Route
The original-value route is the default, and it carries a built-in check on value. The current-value route is where a new appraisal actually sets the LTV. They sound similar, and they work differently.
Original-value route. Say your balance reaches 80% of original value. You ask to cancel. The servicer confirms three things: you have a good payment record, no second lien sits behind your loan, and the home has not lost value. For that last check, the guide says the servicer verifies that current value is at least equal to original value, using the investor’s own system first. If the system value meets the test, the servicer ends PMI and notifies you.
Here is the catch. On this route, the valuation only tests for a decline. A higher number does not speed up your date. The CFPB’s own bulletin on PMI says the same: timing is calculated on original value, and any appraisal is used to check whether value fell below it.
Current-value route. This is the route for homeowners whose homes have risen in value. Freddie Mac’s Guide section 8203.2 has parallel tracks for original value and current value. The servicer uses a BPO or appraisal to set the new LTV. Both agencies attach conditions, and insurer summaries describe a seasoning ladder: a younger loan faces a stricter LTV threshold, and an older loan gets more room. Treat those exact tiers as something to confirm with your servicer, because they differ by investor and by how many units the home has.
Improvements. If you made substantial improvements, such as an addition or a major remodel, the seasoning requirement may ease. Freddie Mac’s guide says the valuation must be prepared after the work is finished, and the work must conform to local zoning and building codes. Keep your permits and contractor records.
A recent change. Fannie Mae has told servicers they may now reach out to borrowers who may qualify for termination on current value. Before that, servicers were told not to solicit these requests. The published guide pages may lag the letter, so ask your servicer what it does today. Do not wait for a phone call you may not get.
Worked Examples
These use percentages, not dollars, to keep the logic clear. They are modeled assumptions, not predictions.
Appraisal matches price. You buy a primary residence at 95% LTV. Original value equals the price. PMI follows the original-value schedule. Nothing surprising happens. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Appraisal comes in below price. You agree to buy at one price, and the appraisal lands a few percent under it. The lender uses the lower number. A loan sized at 95% of the price now sits above 95% of value. That is over the standard cap, so you would bring more cash, renegotiate, or choose another structure. The lower figure also becomes your original value for the life of the loan, which means cancellation dates are measured against it.
Appraisal comes in above price. You paid less than the appraisal says. The lender still uses the lower figure, the price. Your original value is the price. The higher appraisal gives you a nice feeling and nothing else.
Years later, values have risen. Your balance is well below 80% of what the home would sell for today, but still above 80% of the original value. The original-value route says wait. The current-value route says ask, if your loan’s age and the property type meet the investor’s conditions. The servicer orders a valuation. If it supports the lower LTV, PMI can end.
After a refinance. A new loan means a new appraisal, and that value becomes the baseline. If you have built equity, a refinance may start you below 80% and skip PMI entirely. A refinance has its own costs, so it is a decision, not a free reset.
Where the General Rule Breaks
Several situations change the math, and the servicer, not the calculator you found online, has the final say.
- Two- to four-unit homes and second homes. The federal law itself covers single-family primary residences. The agencies extend similar policies to second homes. For two- to four-unit principal residences and investment properties, Fannie Mae’s guide sets a much lower LTV test on original value. If part of your home is rented out, occupancy decides the leverage and the cancellation threshold.
- Lender-paid mortgage insurance. It is built into the loan and does not follow the standard cancellation path. Check your closing documents.
- Older loans. The federal rule applies to loans closed after it took effect in the late 1990s. Earlier loans follow other terms.
- Portfolio and jumbo loans. Investor rules differ. The federal baseline still applies, so ask the servicer how.
- Disaster-affected homes. Freddie Mac’s guide has special treatment. Ask your servicer if this fits you.
- FHA loans. Not covered here. FHA mortgage insurance follows its own rules, and this article is about PMI on conventional loans.
Honestly, this is where most online calculators fail. They assume a one-unit home you live in, a loan that follows the standard path, and a servicer that will use your appraisal. Miss one of those and the answer shifts.
What If the Appraisal Comes Back Low?
If current value is lower than original value, the servicer denies the request. That is the rule. The guide also says you can pay down the balance or choose to verify value with a BPO or an appraisal.
You have three options. Pay extra principal to bring the balance down to the threshold. Wait and ask again later. Or ask the servicer how to appeal the valuation, since the investor’s system lists appealing a valuation as an available action. Appeals work best with evidence: recent sales of similar homes nearby, or records of improvements.
Cost deserves a plain mention. The investor’s cost schedule for a BPO is lower than for a full appraisal. The servicer may pass the cost to you, and what you are charged may differ from what the investor budgets. Ask for the amount in writing before you agree to anything.
Mistakes That Cost Borrowers Months
“My home gained value, so PMI should drop on its own.” It will not. The automatic test runs on original value and the loan schedule. Appreciation helps only through a request.
“A new appraisal moves up my date.” On the original-value route, it only tests for decline.
“80% always works.” Current-value requests carry seasoning and LTV tiers. Loan officers can oversimplify this, so check the details.
“The lender will tell me.” You get disclosures and annual notices. Servicers only recently gained room to contact borrowers about current-value cases.
“Any appraisal counts.” The valuation generally has to go through the servicer’s process.
“Extra payments will move the automatic date.” They do not change the scheduled 78% date. They can, though, help you reach the 80% threshold for a request. (That is a useful distinction, and one worth planning around.)
In the files Lendmire sees, the most common stall is not a denial. It is a borrower who paid for an appraisal before calling the servicer, then learned the servicer wanted its own. The strongest requests tend to arrive with a clean recent payment record, no second lien, and a written question about which valuation the servicer will accept.
A Servicer Call Checklist
Use these questions in order. Write down the name of the person and the date.
1. Who owns my loan, and is my mortgage insurance borrower-paid?
2. What is the original value you have on file?
3. On what date will my balance be scheduled to reach 80%, and 78%?
4. Is my loan eligible for a current-value request, and what loan age and LTV does it require?
5. Who orders the valuation, and what will it cost me?
6. Do I have any second liens that would block the request?
7. What written confirmation will I receive when you decide?
A short written request following the call is sensible. Name the loan, state that you are asking to cancel PMI, identify the route, and ask for the decision in writing.
What to Do Next
Pick your route using these points. Under 80% of original value and a clean record? Ask for the original-value request. Above that, but with real appreciation or big improvements? Ask whether a current-value request is open to you. Still far from either? Track the scheduled dates and revisit after extra payments or a refinance.
If you are buying a home and want to see whether a conventional loan fits your file, Lendmire can help you compare the options and what each one asks of the file. Program figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Frequently Asked Questions
Does PMI go away automatically when my home’s appraised value rises?
No. The automatic end runs on the original value and your loan schedule. A higher appraisal helps only if you make a current-value request and your servicer accepts it.
Can I order my own appraisal to cancel PMI?
Usually you should not do it first. Servicers generally order the valuation through the investor’s own process, and a report you commissioned may not be accepted. Ask what the servicer will use, and what it will charge you, before you spend money.
What is “original value” on a purchase loan?
It is typically the lower of the purchase price or the appraised value. If you refinance, the new appraisal generally takes over as the baseline. Your closing papers show both numbers.
What happens if the new valuation is below my original value?
The request is denied under the investor’s rules. You can pay down the balance, wait, or ask to verify value through a BPO or appraisal. Appealing the valuation with recent nearby sales is also an option.
Does lender-paid mortgage insurance follow the same rules?
No. It is a different structure, and cancellation works differently. Your closing documents show which kind you have, and your servicer can explain the options.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about two minutes you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Consumer Financial Protection Bureau
2. Fannie Mae Lender Letter LL-2018-03
3. Fannie Mae Servicing Guide B-8.1-04: Termination of Conventional Mortgage Insurance
4. Freddie Mac Seller/Servicer Guide Section 8203.2
5. Fannie Mae Lender Letter: Updates to Mortgage Insurance Termination Requirements
This article is part of Lendmire’s conventional loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Is Refinancing Into a Conventional Loan Worth It? · Conventional Loan PMI Requirements for First-Time Buyers · Conventional Loan PMI Rules for Buyers Putting Less Down
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.