Millions of American homeowners are quietly paying an extra $100 to $300 every month for something they may no longer need.
It's called private mortgage insurance, or PMI, and it typically gets tacked onto conventional loans when buyers put down less than 20 percent.
Here's the frustrating part: many borrowers keep paying it for years after they've technically earned the right to drop it.
With home values up sharply since 2020, a large share of those homeowners could now qualify to cancel — if they know the rules.
It protects the lender if you default, and it usually costs between 0.3 percent and 1.5 percent of your loan amount per year.
On a $350,000 mortgage, that's roughly $1,050 to $5,250 annually — real money that could be going toward groceries, a car payment, or your emergency fund.
The clearest path to removal is the automatic one.
Under federal law, your servicer must cancel PMI once you reach 78 percent loan-to-value based on your original purchase price and the original amortization schedule — as long as you're current on payments.
At 80 percent LTV, you can request cancellation yourself, and servicers generally have to say yes if your payment history is clean.
But there's an angle most people miss: you don't have to wait for the loan balance to fall.
A new appraisal can reflect today's market value, and if your home has appreciated, you may hit that 80 percent threshold much faster.
Say you bought at $300,000 with 10 percent down.
If nearby sales now support a $400,000 value, your loan-to-value could already be under 80 percent.
Getting a reappraisal usually costs $400 to $800 out of pocket, so run the math first.
If PMI runs $200 a month, you'd recoup that cost in two to four months and save thousands after that.
Ask your servicer for its specific appraisal process before ordering one on your own.
FHA loans work differently — most FHA borrowers pay mortgage insurance premiums for the life of the loan unless they refinance into a conventional product.
Investment properties and second homes don't get the same automatic cancellation rights.
And if you've missed payments or have a second mortgage or HELOC, the lender may treat your LTV differently.
Pull your latest mortgage statement, find the PMI line item, and call your servicer.
Ask three questions: What's my current loan-to-value based on the original value?
What's your process for a borrower-requested cancellation?
And do you accept a new appraisal to establish current value?
While you're at it, check whether your loan is owned by Fannie Mae or Freddie Mac using their online lookup tools.
Their guidelines govern most conventional loans, and knowing your investor helps you push back if a servicer gives you vague answers.
Refinancing is another option, but with rates still elevated compared to the 3 percent era, it rarely pencils out just to kill PMI.
Crunch the break-even point before committing.
Our take: PMI cancellation is one of the few household money moves that can save you real cash with a single phone call.
Final Thoughts
Servicers have little incentive to remind you, so set a calendar reminder to review your LTV every year — the savings belong to you, not the bank.