If you bought a home in the last few years with less than 20 percent down, there's a decent chance you're paying for something that does nothing for you.
It's called private mortgage insurance, and it typically runs between 0.5 percent and 1.5 percent of your loan amount every year.
On a $350,000 mortgage, that's roughly $145 to $440 extra per month — money that protects your lender, not you, if you default.
The rules for getting rid of it are more borrower-friendly than most homeowners realize, and a wave of buyers who purchased during the 2020–2022 frenzy are now hitting the thresholds that make removal possible. **Two paths to removal** The first is automatic.
Under federal law, your servicer must cancel PMI once your loan balance drops to 80 percent of the home's original value — based on the purchase price, not today's market value — as long as you're current on payments.
That happens on its own, no paperwork required.
The second path is requesting removal early, and this is where people leave money on the table.
Once you hit 80 percent loan-to-value, you can ask your servicer to drop PMI.
Many lenders will also consider it at 80 percent based on a new appraisal if your home has gained value — which is a very different calculation in a market where prices jumped. **What you'll actually need** Expect to submit a written request, prove you're current, and possibly pay for a new appraisal, typically $400 to $700.
Some servicers accept a broker price opinion or automated valuation for less.
Ask which options they accept before you pay for anything.
Many conventional loans require two years of on-time payments before you can request removal based on current value, and five years before removal based on the original value in some cases.
FHA loans have their own rules — if you put down less than 10 percent, that mortgage insurance premium usually lasts the life of the loan unless you refinance. **The math worth doing** Run your own numbers before calling.
Pull your latest statement, find the PMI line, and multiply it by 12.
Then compare that annual figure to the cost of an appraisal.
If you're paying $200 a month, that's $2,400 a year — an appraisal pays for itself in under four months.
One more thing: keep paying your regular mortgage during the process.
Missing a payment can reset your eligibility, and servicers are not required to backdate the removal. **A closing thought** PMI removal is one of the few household money moves that requires no market timing and no risk — just a phone call, some paperwork, and a willingness to ask.
Final Thoughts
If you've been paying it for years without checking, that's likely the most expensive oversight in your budget right now.