The Quick Read: Usually yes, but you generally have to ask. Borrower-paid mortgage insurance can end before the automatic cutoff in two ways: you pay the balance down to 80% of the home’s original value, or your home’s current value rises enough to meet the loan owner’s test. Your servicer makes the call, and a refinance is the fourth route if the first three don’t fit.
Private mortgage insurance (PMI) is the coverage a conventional lender requires when you put down less than 20%. It protects the lender, not you. You pay for it monthly, and it’s one of the few housing costs you can actually get rid of.
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.
This guide covers the four routes, who decides, what blocks a request, and how to choose. It is written for homeowners, and every program figure is subject to lender guidelines and full file review.
Key Terms Defined
Original value: For a purchase, the lesser of the sales price and the appraised value. For a refinance, the appraised value.
Current value: What the home is worth today, based on a new valuation.
Loan-to-value (LTV): Your loan balance divided by the home's value, shown as a percentage.
Servicer: The company you send your payment to. It handles your request.
Termination: PMI ends automatically because a date or balance threshold was reached.
Cancellation: PMI ends because you asked and met the conditions.
Seasoning: How long you have held the loan before certain requests are allowed.
Subordinate (junior) lien: A second mortgage or home equity loan sitting behind your first mortgage.
What Are the Four Ways to Drop PMI?
You have four routes: wait for automatic termination, request cancellation at 80% of original value, request cancellation based on current value, or refinance into a new loan. Each has a different trigger and a different person starting it.
| Route | Trigger | Who starts it | Valuation needed? |
|---|---|---|---|
| Automatic termination | Scheduled balance hits 78% of original value | Servicer | No |
| Request at 80% | Balance reaches 80% of original value | You | Sometimes |
| Current-value request | Home value rises or you improve it | You | Yes |
| Refinance | New loan at 80% LTV or below | You | Yes, new appraisal |
Think of the first route as the backstop and the others as the early exits.
Route 1: Automatic Termination at 78%
Federal law requires your servicer to end PMI automatically when your scheduled balance reaches 78% of the original value, as long as you are current on payments. This is the backstop. You do nothing, and you pay the most.
The CFPB explains that the servicer must terminate PMI at that point. The statute is the Homeowners Protection Act, which covers mortgages made on or after July 29, 1999, per the CFPB's examination procedures.
There is a second backstop. The servicer must end PMI the month after the midpoint of your amortization schedule if you are current. For a thirty-year loan, that is just past year fifteen.
Two details trip people up. First, "scheduled" means the balance on the original payment schedule, not your actual balance. Second, appreciation does nothing here. Your home can double in value and automatic termination still follows the schedule.
Misconception worth killing: 80% and 78% are not the same thing. At 80% you may ask. At 78% the servicer must act.
Route 2: Ask at 80% of Original Value
You can request cancellation when your balance is scheduled to reach 80% of the original value, or earlier if extra payments get you there. Your request must be in writing and meet four conditions.
According to the CFPB, you must:
- Submit the request in writing.
- Have a good payment history and be current.
- Certify that you have no junior liens, such as a second mortgage.
- Provide evidence, such as an appraisal, that the value has not fallen below the original value.
The Fannie Mae Servicing Guide uses the same original-value test for a one-unit principal residence or second home. It also requires the servicer to verify the current value is not less than the original value.
Extra principal payments are the lever here. Each one pulls your balance toward 80% sooner. Your PMI disclosure form should show the first date you can make the request, so find it and mark it.
Picture a buyer who put 5% down on a one-unit primary home. Pricing and available terms vary by lender, borrower profile, property type, and full underwriting review. They need to close a 15-point gap to reach 80%. Regular payments will do it eventually. Extra principal payments shorten that stretch. Same request, earlier date.
Route 3: Ask Based on Current Value
If your home has gained value or you've made major improvements, the loan owner may let you cancel PMI based on today's value instead of the original. This is the true early route, and it comes from investor policy rather than federal law.
Here's the catch many homeowners miss. The federal 80% and 78% tests use original value. Current-value cancellation comes from the policies of Fannie Mae and Freddie Mac, which own or guarantee most conventional loans, and your servicer applies whichever one owns your loan.
Freddie Mac's Guide Section 8203.2 sets the test for a one-unit loan, using your current unpaid balance and current value:
- 75% LTV or less if the loan is between 2 and 5 years old.
- 80% LTV or less if the loan is more than 5 years old.
- The 2-year seasoning is waived for substantial improvements, but the LTV must still be 80% or less. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Freddie also requires a clean payment record. The loan must be current, with no payment 30 or more days late in the last 12 months and none 60 or more days late in the last 24 months.
Fannie Mae's servicing rules also allow cancellation on current value. Tests for two- to four-unit homes and investment properties are tighter than for a one-unit primary home.
Who orders the valuation, and who pays?
The servicer orders it. Fannie Mae's servicing guidance calls for an interior and exterior broker price opinion on one-unit homes, or an appraisal if the servicer determines law requires it. Expect an upfront cost, and ask who bears it before you say yes.
The newest wrinkle
Fannie Mae now lets servicers contact borrowers who may qualify for current-value termination. That is outreach only. Fannie Mae's lender letter permits servicers to solicit eligible borrowers, and Florida Realtors reports it does not mean coverage ends automatically when a home gains value. The thresholds are unchanged. Don't wait for the phone to ring.
Route 4: Refinance Out of PMI
A refinance removes PMI when the new loan sits at 80% LTV or below, which depends on enough equity at the new appraisal. It's the right answer when the other routes are blocked, but it comes with closing costs, so it needs a break-even check. Terms depend on the lender's guidelines, the property type, the leverage, and a full review of the credit profile.
Across the wholesale programs Lendmire places files with, a conventional rate-and-term refinance on a one-unit principal residence can go up to 95% LTV, with mortgage insurance required above 80%. That means a refinance only drops PMI if your new LTV lands at 80% or less. A cash-out refinance on a one-unit primary home tops out at 80% LTV, and a wholesale lane reaches 89.99% with no mortgage insurance for qualifying borrowers on a thirty-year fixed primary residence. Those lanes carry their own credit, ratio, and seasoning requirements, all subject to lender guidelines.
Ask these break-even questions before you refinance:
- How much will closing costs add up to, and are they paid up front or folded into the balance?
- How long will you keep the home and the loan?
- Would a request to your current servicer get you the same result for the cost of a valuation?
- Does the new loan's term reset your payoff schedule?
If the servicer route works, it usually beats a refinance on cost. If it doesn't, a refinance can be the clean way out. One note on Lendmire's role: it is a broker that arranges these loans through wholesale lenders and does not lend itself.
If you're weighing this and want to see how the programs line up on your own home, Lendmire's conventional loan programs page lays out the options.
Which Route Fits Your Situation?
Match the route to your situation, not to what sounds fastest. The five situations below cover most homeowners.
| Your situation | Best first move |
|---|---|
| Paying down on schedule, nothing unusual | Request at 80% of original value |
| Home value rose, loan is a few years old | Current-value request |
| Major renovation recently finished | Current-value request, improvements waiver |
| Second mortgage or HELOC on the home | Resolve the lien first, or consider refinancing |
| Lender-paid mortgage insurance | Refinance is the way out |
Newer buyers have a different timing problem. Lendmire's piece How to Remove PMI Early as a First-Time Buyer on a Conventional Loan walks through it for people who put very little down.
The stronger play for many homeowners is to run the current-value test first. It costs a valuation and may end PMI years ahead of the schedule. Refinancing is the genuine toss-up: it fixes more problems but costs more.
What Blocks Removal?
Four things most often block a request: a second lien, a late payment, a value that has fallen below the original, or mortgage insurance you can't cancel. Each has a fix.
A second lien. The CFPB lists the junior-lien certification as a condition. A HELOC or piggyback loan can stop a request cold. Paying it off, or refinancing both loans together, clears the block.
Payment history. One 30-day late in the past year can sink a current-value request. Fannie Mae measures its 12- and 24-month histories backward from the later of the 80% date or your request, so waiting can heal this.
Falling values. If the home is worth less than the original value, you may not be able to cancel on schedule. Wait for the market, or keep paying down principal.
Lender-paid or government-backed insurance. Lender-paid mortgage insurance isn't cancelled by the borrower, so a refinance is the way out. FHA insurance is a different product with different rules. Fannie Mae's consumer site notes it is more complicated and may involve refinancing.
Check which kind you have. Your closing documents and mortgage statement should show whether the premium is borrower-paid, and your servicer can confirm it.
How to Submit Your Request
Write to your servicer, state the loan number, and ask for cancellation of PMI. Attach proof of value if you are using the current-value route. A letter creates a record.
Here is the order that works:
1. Find out who owns your loan. Fannie Mae or Freddie Mac rules apply, and your servicer can tell you.
2. Confirm the PMI is borrower-paid.
3. Pick your route using the table above.
4. Call the servicer and ask for its cancellation requirements and valuation process.
5. Send a written request with your loan number, the property address, and the basis for the request.
6. Certify no junior liens, and gather payment records if asked.
7. Cooperate with the valuation and ask who pays for it.
Questions to ask your servicer:
- Which investor owns my loan?
- What valuation do you require, and what does it cost?
- What does my payment record need to show?
- What is the earliest date I can request under each route?
Servicers can't charge a fee for processing an automatic termination. A cancellation request may carry a valuation cost.
If the Servicer Says No
Ask for the denial reason in writing, then fix the specific issue. Most denials trace to a lien, a payment-history blemish, a valuation that came in low, or a loan that doesn't meet seasoning.
| Denial reason | Likely fix |
|---|---|
| Value came in low | Wait and re-request, or use your own improvements as support |
| Second lien | Pay it off or subordinate it as part of the refinance |
| Late payment on record | Wait for the history window to clear |
| Not enough seasoning | Re-request once the loan is old enough |
| Wrong MI type | Refinance |
If you believe the servicer misapplied the rules, escalate within the company first, then consider a complaint to the CFPB, which supervises and enforces compliance with the Homeowners Protection Act.
Confirm It Worked
Check your next statement and escrow account. The PMI line should be gone, and your payment should drop. Ask for written confirmation of termination.
Keep that letter. If PMI keeps showing up, send it back to the servicer. The CFPB notes that ending PMI reduces your monthly costs, so you should see the change right away.
Frequently Asked Questions
Can I remove PMI without refinancing?
Yes, in most cases. You can ask your servicer to cancel at 80% of original value, or request cancellation on current value if your loan owner allows it and you meet its seasoning and payment tests. A refinance is only one of four routes.
Does an extra payment help?
Yes. Extra principal payments pull your balance toward 80% of original value sooner, which can bring the request date forward. Make sure the servicer applies the extra money to principal, and confirm your new balance before you send the request.
Do I need an appraisal to cancel PMI?
Often, but not always. On the original-value route, servicers need evidence the value hasn't fallen below the original. On the current-value route, the servicer orders a valuation, usually a broker price opinion on a one-unit home or an appraisal in other cases, and you may bear the cost.
Does this work on FHA loans?
No. FHA mortgage insurance is a separate product with its own rules, and getting out of it may mean a refinance. The routes in this guide apply to borrower-paid PMI on conventional loans.
What if my home value dropped?
Then the current-value route is closed for now, and you may not be able to cancel on schedule. Keep paying down principal, and revisit the request when values recover. Automatic termination at 78% of original value still applies on the original schedule.
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. For many homeowners, a more affordable route is the one you can start with a single letter to your servicer.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and home buyers in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Ask CFPB: When can I remove PMI
2. CFPB: Homeowners Protection Act examination procedures
3. Fannie Mae Servicing Guide B-8.1-04: Termination of conventional mortgage insurance
4. Freddie Mac Guide Section 8203.2
5. Fannie Mae Servicing Guide F-1-02
6. Fannie Mae Lender Letter LL-2026-07
7. floridarealtors.org: FHFA Moves Expand Mortgage Insurance Outreach
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 PMI Calculation Rules for Appraised Value and Price · Conventional Loan With PMI vs Waiting to Save a Bigger Down Payment · Conventional Loan PMI Cancellation Rules and Payment History
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.