Millions of homeowners are quietly handing over an extra $150 to $300 every month for private mortgage insurance, and many of them no longer need to.
It's a temporary safety net your lender required because you put down less than 20 percent.
Once you've built enough equity, you can ask to cancel it — and the savings can be real money.
The catch is that "enough equity" depends on which rule applies to you, and the paperwork doesn't happen automatically in most cases.
If you're still paying PMI and haven't checked your loan terms in a while, this is worth a look before your next payment clears. **Two different rules, two different thresholds** For conventional loans, the federal Homeowners Protection Act gives you the right to request PMI cancellation once you reach 20 percent equity based on your home's *original* value.
That usually means your loan balance has dropped to 80 percent of what you originally paid.
You'll generally need a good payment history and may be asked to confirm the home hasn't lost value.
There's also an automatic termination point.
Your servicer has to drop PMI on its own once you hit 22 percent equity based on the original value, as long as you're current on payments.
That's the backstop — but it can take years longer than requesting removal yourself. **The appraisal question that trips people up** If your home has appreciated a lot, you might hit 20 percent equity faster than your loan balance suggests.
Some lenders will consider a new appraisal to prove it, but you typically pay for that out of pocket — often $400 to $800.
Run the math: if PMI costs $200 a month, an appraisal can pay for itself in a few months.
For most FHA loans made after mid-2013 with less than 10 percent down, PMI (called MIP) lasts the life of the loan unless you refinance into a conventional mortgage.
That's a big reason refinancing comes up so often in these conversations. **How to actually get it removed** Start by finding your original loan documents or calling your servicer and asking two questions: what's my current loan-to-value ratio, and what's your specific process for PMI removal?
Under federal law, your servicer has to respond.
Keep a copy, note the date, and follow up if you don't hear back within a reasonable window.
Borrowers who stay polite but persistent tend to get further than those who wait for the lender to volunteer the information.
One more thing worth checking: your credit score and payment history.
A single late payment in the past year can sink a removal request, so time your ask for a clean stretch. **The refinancing wildcard** If rates have dropped since you bought, refinancing could kill two birds — lower your rate and eliminate PMI if you now have 20 percent equity.
Just weigh the closing costs against your monthly savings.
A refi that saves $180 a month but costs $4,000 upfront takes about two years to break even, so it only makes sense if you plan to stay put. **Our take** PMI removal is one of the few household money moves that requires almost no sacrifice — you're just asking for a fee to stop.
Servicers have little incentive to remind you, so the burden falls on you.
Spend twenty minutes this week checking where you stand.
Final Thoughts
If you've crossed the threshold, that phone call could be the easiest raise you get all year.