If you bought a home with less than 20 percent down, you probably know the sting of private mortgage insurance.
That extra line item gets bundled into your monthly payment, and it doesn't protect you—it protects the lender if you default.
For many buyers, PMI runs somewhere between 0.3 percent and 1.5 percent of the loan amount annually, which on a $350,000 mortgage can mean $100 to $400 every single month.
The good news is that PMI isn't permanent.
There are two main paths to get rid of it, and knowing which one applies to your loan can save you serious money.
Under the Homeowners Protection Act, your servicer must cancel PMI once your loan balance drops to 78 percent of the home's original value—based on the original purchase price and amortization schedule, not on how much the home is now worth.
That happens on its own, whether you ask or not.
You don't need an appraisal, and you don't need to do anything except keep paying on time.
The second path is requesting removal earlier.
Once your balance hits 80 percent of the original value, you can formally ask your servicer to drop PMI.
This is where it pays to do the math yourself, because servicers won't always volunteer it.
Pull up your latest statement, check your remaining principal, and compare it to 80 percent of your original loan amount.
Here's the catch: your servicer will likely require you to prove the home hasn't lost value.
That usually means paying for an appraisal, which can run $400 to $700 depending on your market.
Some loans—especially FHA loans—have different rules entirely, and FHA mortgage insurance often can't be removed the same way without refinancing.
If you have an FHA loan, call your servicer and ask exactly what applies to you.
You generally need a good payment history—no 30-day late payments in the last 12 months, and typically no more than one in the past two years.
If you've been late recently, get current and stay current before you request removal.
One more thing worth checking: if your home value has jumped since you bought it, you may be able to cancel PMI even sooner than the 80 percent threshold.
Some servicers allow it based on a new appraisal showing you have at least 20 percent equity, even if your loan balance hasn't hit that mark on paper.
Ask specifically about this option—the rules vary by lender and loan type.
Dropping a $200 monthly PMI payment frees up $2,400 a year, which is real money for groceries, an emergency fund, or an extra principal payment that builds equity even faster.
The takeaway is simple: don't assume your servicer will automatically do right by you at the earliest possible moment.
The law sets a floor, not a ceiling, on when PMI can come off.
Read your statement, know your numbers, and make the call yourself.
Final Thoughts
A ten-minute phone conversation could be the highest-paid ten minutes of your month.