When can I remove private mortgage insurance from my loan?

The CFPB says you have a right to remove private mortgage insurance on many mortgages once the balance has fallen to a specified point, which lowers the monthly cost. The legal requirements described here apply to mortgages on single-family principal residences that closed on or after July 29, 1999. FHA and VA loans have different requirements; ask the servicer. Lender-paid mortgage insurance also follows different rules. Some servicers may allow earlier removal under their own standards, and Fannie Mae or Freddie Mac guidelines cannot be less favorable than the federal baseline.

You may request cancellation on the date the principal balance is scheduled to reach 80 percent of original value, or sooner if extra payments have already reduced the balance to that level. Original value is generally the lesser of the contract price or the appraised value at purchase, or the refinance appraisal if you refinanced. The servicer must grant a written request if you are current with a good payment history, you certify there are no junior liens, and you can show the property has not fallen below original value.

Even without a request, the servicer generally must terminate PMI when the scheduled balance reaches 78 percent of original value if you are current, and must end PMI the month after the midpoint of the original term if you are current. These are legal cancellation rights with conditions, not a promise that PMI will end on a date you choose.