The Quick Read: Under the Homeowners Protection Act (HPA), private mortgage insurance on a conventional loan ends in three ways: you can request cancellation when the balance is scheduled to reach 80% of the home’s original value, the servicer must end it automatically at 78%, and it must end at the loan’s midpoint if you are current. Each path has conditions. The 80% request needs a good payment history, no junior liens, and no drop in value. Automatic termination needs you to be current on the loan.
Key Takeaways
- The 80% and 78% marks run off the original value and the original amortization schedule, not today’s market value.
- Reaching 20% equity does not end PMI on its own. At 80% you must ask. At 78% the servicer acts.
- Extra principal payments can pull your request date earlier. They do not move the automatic dates.
- Appreciation and improvements can help through a separate current-value route set by the agencies, with seasoning rules and a paid valuation.
- FHA mortgage insurance and lender-paid mortgage insurance sit outside this framework.
Why PMI Exists on a Conventional Loan
PMI protects the lender when the down payment is small. On a conventional loan, mortgage insurance is required once leverage goes above 80% of value. Across the wholesale programs placed through Lendmire, a first-time buyer on a principal residence can reach 97% loan-to-value (3% down) on a fixed-rate loan, and other buyers can reach 95% (5% down). That means many borrowers start with PMI. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
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.
The good news is that conventional PMI is not permanent. Fannie Mae’s Selling Guide says the requirement applies to a conventional first mortgage above 80% LTV, and the HPA sets the rules for when it comes off. Buyers weighing conventional loan programs should understand those exit dates before they sign, because the date you can cancel is built into the loan from day one. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
PMI cost varies by borrower and loan. Published typical annual premiums run from 0.58% to 1.86% of the balance, which is a range and never a quote. Ending it lowers your monthly costs, which is why the dates matter.
What the HPA Is and Which Loans It Covers
The HPA was signed in 1998 and took effect in 1999. According to the federal consumer-finance regulator’s consumer guidance, the legal requirements it describes apply to single-family principal residences with mortgages that closed on or after July 29, 1999. The federal consumer-finance regulator also notes that some lenders and servicers may allow PMI removal under their own standards.
That last point matters. The HPA is the floor. Fannie Mae and Freddie Mac add their own rules, including a route based on current value. Keep the two layers separate in your head:
- Statute (HPA): the 80% request, the 78% automatic termination, and the midpoint backstop.
- Agency and servicer rules: current-value cancellation, seasoning periods, and valuation requirements.
Key Terms Defined
Original value: The lower of the purchase price or the appraised value at closing. It stays fixed for HPA purposes.
Scheduled date: The date the balance is supposed to hit a target, based on the original amortization schedule and on-time payments.
Good payment history: A clean record of on-time payments, tested over a look-back window set by the agency guide.
Junior lien: A second mortgage or home equity loan that sits behind your first mortgage.
BPO: A broker price opinion, a valuation of the home that can be used instead of a full appraisal.
Amortization midpoint: The halfway point of the loan term, such as the end of year 15 on a 30-year loan.
Three Ways PMI Ends Under the HPA
| Path | Who starts it | Trigger | Key condition |
|---|---|---|---|
| Borrower request | You | 80% of original value | Written request, good history, no junior liens, value not below original |
| Automatic termination | Servicer | 78% of original value, per schedule | Borrower must be current |
| Final termination | Servicer | Month after the midpoint | Borrower must be current |
Path 1: Asking at 80%
You can ask the servicer to cancel on the date the balance is scheduled to fall to 80% of original value. The CFPB says extra payments can bring that date earlier. The servicer must grant the request if you:
1. Ask in writing.
2. Have a good payment history and are current.
3. Certify there are no junior liens, such as a second mortgage.
4. Provide evidence, such as an appraisal, that value has not dropped below the original value.
The first date you can request cancellation should appear on your PMI disclosure form from closing.
Path 2: Automatic Termination at 78%
The servicer must end PMI on the date the balance is first scheduled to reach 78% of original value, based on the initial amortization schedule. The CFPB’s HPA examination procedures note that this path has no protection against value declines or subordinate liens, unlike the request path.
You must be current. If you are not, NCUA’s HPA procedures, which mirror the statute, say PMI ends on the first day of the first month after you become current.
Waiting for the automatic date means paying for about two more percentage points of equity than you needed to. Asking at 80% is the cheaper route when you qualify.
Path 3: The Midpoint Backstop
If you are current, PMI must end the month after the midpoint of the amortization schedule, even if the balance has not reached 78%. The CFPB says this is more likely on loans with an interest-only period, principal forbearance, or a balloon payment. On a 30-year loan, the midpoint is the end of year 15. On a 15-year loan, it is the end of year 7 and a half.
Original Value: The Detail Most Borrowers Miss
The 80% and 78% triggers use the original value, which on a purchase is the lower of price or appraisal. They also use the original schedule. Your home could double in value and the HPA dates would not move.
That surprises many owners. Picture a buyer who put 5% down and watched the neighborhood climb. The HPA dates still follow the closing-day numbers. Appreciation helps only through the agency current-value route, covered below. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
How a Servicer Handles Your Request
Fannie Mae’s Servicing Guide lays out how a servicer evaluates a request based on original value. In plain terms, the servicer will:
1. Check the LTV. For a one-unit principal residence or second home, the balance must be scheduled to reach, or actually reach, 80% of original value.
2. Check your payment history. The 12- and 24-month histories are measured backward from the later of the 80% date or the date you ask.
3. Check value. The current value must not be less than the original value.
If the servicer orders a valuation and it comes in at or above the original value, the servicer ends the insurance and notifies you. If it comes in lower, the request is denied unless you pay the balance down enough to meet the LTV test.
A federal bank-regulator page, HelpWithMyBank.gov, gives a general summary of the payment-history test. The exact window your servicer applies comes from the agency guide, so ask for it directly.
A Simple Scenario
Say a buyer takes a 95% LTV purchase loan and makes every payment on time. Years later, a home equity loan goes on the property. That second lien blocks the request path until it is paid off or otherwise cleared. The automatic path still works at 78%, but it comes later. The borrower’s choice is whether to clear the lien and ask early, or wait. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
When Appreciation or Improvements Change the Math
The request path uses original value. If your home has gained value or you made major upgrades, there is a separate route. Freddie Mac’s Guide, section 8203.2 sets current-value tiers:
- LTV of 75% or less if the loan is seasoned two to five years.
- LTV of 80% or less if the loan is seasoned more than five years.
- The two-year seasoning is waived for substantial improvements, but LTV must then be 80% or less. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Fannie Mae’s thresholds are consistent for a one-unit principal residence or second home, though borrowers should confirm against the current Servicing Guide.
Who pays for the valuation? The borrower does. Freddie Mac’s rules call for a new interior and exterior BPO at the borrower’s expense, unless law requires an appraisal or the servicer decides an appraisal serves you better. For improvements, the valuation must describe the nature, extent, and cost of the work and its effect on value. Improvements that substantially extended the property’s useful life count, and routine maintenance does not.
A newer servicer duty. Fannie Mae’s Lender Letter LL-2026-07 lets servicers solicit borrowers who may be eligible on current value. Freddie Mac’s servicing guide also describes a duty to identify loans near the cancellation point and notify borrowers of next steps. Do not count on a call, though. Track your own dates.
Where the General Rule Breaks
Several situations change the answer.
Second homes and investment properties. The HPA’s statutory rights are described for single-family principal residences. Fannie Mae’s guide still sets cancellation criteria for other occupancy types, but by agency policy. For example, the original-value LTV test is tighter, at 70%, for a two- to four-unit principal residence or a one- to four-unit investment property. Occupancy drives leverage and cancellation alike.
High-risk loans. The CFPB manual says the 80% and 78% rules have exceptions for “high-risk residential mortgage transactions,” a defined category under the statute.
Delinquency. Automatic termination waits until you are current. The request path demands a good payment history.
Value decline. If the home is worth less than the original value, the servicer can deny the request.
FHA loans. FHA mortgage insurance premium is not PMI under the HPA.
Lender-paid mortgage insurance. The cost is built into the loan’s pricing, and the borrower generally cannot cancel it. Confirm with your servicer which type you have.
Refinancing. A new loan at 80% LTV or below on a new appraisal can remove PMI, but it brings closing costs and a new loan to qualify for. It is an option, not a default. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
PMI Cancellation and the Cost Side
For a buyer comparing mortgage insurance across loan types, the end date is part of the cost. Lendmire’s piece How Much Conventional Loan PMI Cancellation Saves Over FHA Insurance walks through why a cancellable premium changes the long-run picture.
Over the years, a lower-down-payment conventional loan can still look better than it first appears if you plan to ask at 80%. The flip side: if you expect a second lien, a drop in value, or payment trouble, the cancellation date may slip. The decision tilts on how likely those are.
Misconceptions Worth Clearing Up
- “PMI drops off at 20% equity.” No. At 80% you may request cancellation. At 78% it ends automatically.
- “The dates follow today’s home value.” They follow original value and the original schedule.
- “The servicer will call me.” Written requests are what the law requires. Agencies allow verbal ones, but the servicer still checks history, liens, and value.
- “Extra payments do nothing.” They can bring your request date earlier. The scheduled automatic dates stay fixed.
- “A higher appraisal always removes PMI.” Seasoning, LTV tiers, lien tests, and payment history still apply.
- “Servicers always get it right.” CFPB exam materials flag failures to terminate PMI on time. Check your own dates.
Your PMI Cancellation Checklist
1. At closing, ask for the HPA disclosure and note the scheduled 80% and 78% dates.
2. Request the amortization schedule from your servicer.
3. Keep a clean payment record.
4. Confirm there are no second mortgages or home equity loans on the property.
5. If you have made extra principal payments, ask for a recalculated request date.
6. Send a written request, and keep a copy.
7. If the home has appreciated or you completed major improvements, ask the servicer about the current-value route and its seasoning and valuation steps.
8. Confirm in writing when PMI ends. Servicers should not require payments more than 30 days after you meet the conditions or after termination.
A good written request names the loan, states the date you reached 80%, certifies no junior liens, confirms your payment history, and asks for the servicer’s written response.
If a request is denied or ignored, ask what is missing, document every contact, and escalate through the servicer’s complaint channel. A regulator complaint is the next step.
What a Buyer Should Do Before Closing
If you are buying, the decision starts earlier. A down payment above 20% avoids PMI entirely. A smaller down payment brings PMI, but the HPA gives it an end date. Across the wholesale programs we place files with, the credit floor starts at a 620 decision score, and the automated finding governs most files, subject to lender guidelines and full file review. Credit and ratios affect the file, but the cancellation rules above apply the same way.
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. For a closer look at condo-specific points, see Lendmire’s guide Conventional Loan PMI Cancellation Rules for a Condo Owner.
Frequently Asked Questions
Does PMI go away automatically when I reach 20% equity?
No. At 80% of original value you may request cancellation, and you must meet the conditions. Automatic termination comes at 78%, based on the original schedule, and only if you are current. The gap means you can pay for PMI longer than necessary if you wait.
Can I cancel PMI early because my home has gone up in value?
Sometimes. That runs through the agency current-value route, not the HPA dates. You pay for the valuation, and liens and payment history still count. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
What happens if I am behind on payments when I reach 78%?
Termination waits. PMI ends on the first day of the first month after you become current. For a request at 80%, a good payment history is a condition, so a recent late payment can delay the request.
Do extra payments change when PMI ends?
They can move your request date earlier, because the balance reaches 80% sooner. The scheduled automatic and midpoint dates stay fixed on the original schedule. Ask your servicer for the recalculated request date in writing.
Does the HPA cover lender-paid mortgage insurance?
Lender-paid mortgage insurance is built into the loan’s pricing, and the borrower generally cannot cancel it.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
3. Freddie Mac
4. CFPB – HPA Examination Procedures
6. Fannie Mae Servicing Guide B-8.1-04
This article is part of Lendmire’s conventional loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Conventional Loan Appraisal Requirements for New Construction · Conventional Loan Requirements for a Primary Home Purchase · Conventional Loan Requirements for a Non-Working Spouse
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.