The Quick Read: It depends on which rule set your request falls under. Federal law measures against your original value, so appreciation does not help there. Fannie Mae and Freddie Mac also allow cancellation on current value, but that is investor policy with seasoning tests, a valuation ordered by your servicer, and a loan-to-value ceiling you have to meet. You ask first. Nothing here is automatic until the 78% mark.
Key Terms Defined
Original value: the lower of the purchase price or the appraised value at purchase. On a refinance, it is the appraised value at that refinance.
Current value: what a servicer-ordered appraisal or broker price opinion says the home is worth today.
LTV (loan-to-value): the unpaid balance divided by the value being counted.
BPO (broker price opinion): a valuation by a licensed agent or broker. Freddie Mac requires an interior and exterior BPO when one is used.
Servicer: the company that collects your payment and applies the loan owner’s rules. It is usually the one deciding on your request.
Termination vs. cancellation: cancellation is you asking. Termination is the servicer ending coverage, either automatically or after a valid request.
Refinance savings and break-even estimate
The starting figures are an example value with a balance in proportion and a placeholder for costs. Replace them with yours, and enter the current rate from your statement.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $245,000 current balance, a current rate you enter and a remaining term seeded at twenty-five years, closing costs seeded at $5,000 as an editable placeholder (not a fee quote) and rolled into the new loan, a thirty-year term at the current Freddie Mac benchmark, 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 new rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a refinance quote; a refinance is priced by the lender at lock, and the current rate, the remaining term and the closing costs are figures you enter. The current payment is estimated from the balance, the current rate and the remaining term; the break-even divides the closing costs by the monthly saving and ignores the interest effect of a longer term. On the VA IRRRL the funding fee is added to the loan unless the veteran is exempt. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages; Lendmire is a broker, never the lender.
Two Rulers, One Loan
PMI ends under two separate rule sets. Mixing them up is a common mistake on these files.
| Factor | Original-value route | Current-value route |
|---|---|---|
| Value counted | Original value | Today's valuation |
| Rule source | Federal law and investor guides | Fannie Mae and Freddie Mac policy |
| Appreciation helps? | No | Yes |
| You must ask? | At 80%, yes | Yes |
| New valuation? | Only to prove value hasn't dropped | Yes |
The CFPB says you can ask your servicer to cancel PMI once your balance is scheduled to reach 80% of the home's original value, or earlier if extra payments get you there. The servicer must grant it if the request is in writing, you are current with a good payment history, you certify there are no junior liens, and you show the value hasn't fallen below the original value. Those legal requirements describe single-family principal residences that closed on or after July 29, 1999. Some servicers allow removal under their own standards beyond that.
Automatic termination is the backstop. If you are current, PMI must end when the balance is scheduled to hit 78% of original value, or at the loan's halfway point, such as year 15 on a 30-year loan. Across the conventional programs we place files with, the structure is the same: coverage is required above 80% LTV, you can request cancellation at 80%, and it ends on its own at 78%. Terms depend on the lender's guidelines, the property type, the leverage, and a full review of the credit profile.
How the Lender Counts Value, Step by Step
Here is the sequence a current-value request follows. The mechanics come from how these files move through servicing.
1. Find out who owns the loan and what kind of PMI you have. Fannie Mae, Freddie Mac or another investor owns it, and your servicer applies that owner's rules. Borrower-paid coverage can be cancelled. Lender-paid coverage is built into the loan's pricing and generally can't be cancelled. The exit there is usually a refinance.
2. Pick the value basis. If your balance is at 80% of original value through the schedule or extra principal, use original value. If appreciation or renovations changed the picture, ask for current value.
3. Check seasoning and payment history. Servicers look at whether you are current and whether you had 30-day or 60-day late payments in the past 12 and 24 months. On Fannie Mae loans, those windows run backward from the later of two dates: when the balance reaches the 80% mark, or when you actually request termination. Fannie Mae's Servicing Guide sets this out.
4. The servicer orders the valuation. You don't pick the appraiser. On one-unit properties, a Fannie Mae servicer must order an interior and exterior BPO, or an appraisal if the servicer determines one is required by law. Fannie Mae's servicing schedule lists a BPO at $190, a restricted one-unit appraisal at $450 and a two- to four-unit appraisal at $750. Treat those as a point-in-time schedule that can change, and ask who pays on your loan.
5. The servicer decides. On the original-value path at Fannie Mae, if the value rendered is at least the original value, the servicer must terminate the coverage and notify you after receiving the value, with timing that varies by file and servicer. If it comes in lower, the request is denied unless you pay the balance down to meet the LTV test. You can also verify value through the servicer's ordering procedure.
6. Get the termination in writing. Keep paying until the servicer confirms in writing that coverage has ended.
What the Current-Value Test Looks Like
Freddie Mac's Guide sets the current-value tiers: the unpaid balance divided by current value must be 75% or less if the loan is between 2 and 5 years old, and 80% or less once it is past 5 years. The two-year minimum can be waived when the servicer determines the value gain comes from substantial improvements, but the LTV must then be 80% or less. Fannie Mae's current-value tiers are the same for a one-unit primary or second home. Fannie Mae moved the improvements threshold from 75% to 80% in a 2018 lender letter, which also allowed BPOs for current value. Check the live guide page before quoting exact tiers, since it can lag letters.
The loan's age is the quiet failure point. A borrower in year three with strong appreciation still has to clear 75%, not 80%. Year six clears at 80%.
Picture a homeowner in year four whose balance sits at about 82% of the original purchase price after a good run of appreciation. On original value, they are close but not at 80% yet. On current value, if a BPO shows the balance at 72% of today's value, they pass the 75% test. Same loan, different ruler, different answer. (A rough pre-check: divide your balance by the value you think a valuation will return, and compare to 75% or 80% based on loan age.)
Where the Rule Breaks
These are the edge cases that derail requests.
- Occupancy and units. Fannie Mae's original-value test is 80% for a one-unit principal residence or second home, but 70% for a two- to four-unit principal residence or any one- to four-unit investment property. Insurer summaries indicate multi-unit and investment properties may not get automatic termination at 78% and instead end at the midpoint.
- Second liens. A HELOC or second mortgage can block federal-law cancellation. Check this before ordering anything.
- Value drops. If the home is worth less than original value, an original-value request can be denied.
- Improvements. The servicer decides whether work counts as "substantial." For these requests, the servicer must pass your improvement details to Fannie Mae. Keep contracts, invoices and before-and-after photos.
- Interest-only periods, forbearance, balloons. The CFPB notes the halfway-point rule matters most for these.
- FHA. FHA mortgage insurance is a different regime, often needing a refinance. This article covers conventional loans only.
- Refinance as the alternative. A new conventional loan resets the clock, brings new closing costs, and puts PMI back if you are above 80% LTV.
Appraisal, BPO or Something Else?
| Valuation | Who orders it | Typical use |
|---|---|---|
| BPO | Servicer | One-unit current-value requests |
| Appraisal | Servicer | When required by law or by the servicer |
| Automated or online estimate | Not accepted on its own | Pre-check only |
An online estimate or a tax assessment will not get PMI removed. It is useful for deciding whether to bother. Fannie Mae's servicer system also includes a path to appeal a completed valuation, so a low number is not always final. If you disagree, gather recent nearby sales and condition details and ask the servicer how to submit them.
Is It Worth Doing?
Run a simple break-even. Compare the valuation fee, if you pay it, against the monthly PMI charge on your statement. Published annual premiums for conventional mortgage insurance run from 0.58% to 1.86% of the balance, a range that depends on credit, leverage and the policy, not a quote. At the low end, a modest fee pays back over a short stretch. At the high end, it pays back sooner. The CFPB notes that ending PMI lowers your monthly cost. The answer on your loan depends on your actual charge and who bears the valuation cost.
If the Valuation Comes In Low
You have four moves, and none is an emergency:
1. Ask the servicer for the valuation and how to appeal it.
2. Pay principal down until the balance meets the test, then reapply.
3. Wait until seasoning improves or value grows.
4. Compare a refinance, where the new loan is sized to the new value. A rate-and-term refinance can go to 95% LTV on a one-unit principal residence, with mortgage insurance above 80%. Subject to lender guidelines and full file review.
A refinance only beats a request when the loan terms or the structure are what you want to change. Running PMI off an existing loan is cheaper in closing costs.
Newest Development: Servicers May Reach Out
Fannie Mae's Lender Letter LL-2026-07 lets servicers proactively contact borrowers who may be eligible for termination based on current value. It changes who speaks first, not the thresholds as far as published summaries show. You can still start the request yourself, and a later guide update may follow.
Request Checklist
- Find your PMI disclosure from closing. It may show your first request date.
- Confirm no second lien exists.
- Pull your payment history for the past 24 months.
- Call the servicer: who owns the loan, what valuation do they accept, who pays, and what documents they want.
- Send the request in writing.
- Keep paying until termination is confirmed in writing.
If you are weighing a refinance and want the break-even run on your own numbers, Lendmire can help you compare the programs on the same home. Details of conventional loan programs are on the site, and the piece How to Remove PMI Early on a Conventional Loan With a New Appraisal covers the appraisal route in more detail.
Frequently Asked Questions
Does PMI come off automatically when my home value rises?
No. Automatic termination counts original value and happens when the balance is scheduled to reach 78%, if you are current. Appreciation only helps through a request based on current value, and that has seasoning and LTV tests.
Do I have to refinance to get rid of PMI?
Not necessarily. Original-value requests, automatic termination and current-value cancellation all exist for conventional loans. Refinancing is the exit mainly for lender-paid coverage or when you want to restructure the loan.
Who chooses the appraiser or BPO provider?
Your servicer orders the valuation. On one-unit Fannie Mae loans it must be an interior and exterior BPO unless the servicer determines an appraisal is required by law. You can appeal a completed valuation through the servicer's process.
Does a late payment from two years ago matter?
It can matter, because servicers look at 12-month and 24-month payment histories for 30-day and 60-day late payments, measured back from the later of the 80% date or your request date.
Can renovations speed this up?
Yes, in some cases. Substantial improvements can waive the two-year seasoning minimum, but the LTV must still be 80% or less. The servicer decides what counts, so keep documentation.
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.
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References
1. CFPB – When can I remove PMI
2. Fannie Mae Servicing Guide B-8.1-04
4. Fannie Mae Lender Letter LL-2026-07
This article is part of Lendmire’s conventional loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Refinance to Drop PMI After Your Home Value Rises? · Conventional Loan Requirements for a Vacation Second Home · Can You Get a Conventional Loan on a Primary Home?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.