Millions of American homeowners are paying private mortgage insurance every month without realizing they may no longer need it.
PMI typically costs between 0.3% and 1.5% of your loan amount annually — on a $350,000 mortgage, that's roughly $90 to $440 every month, folded quietly into your payment.
The good news: new industry guidance has loosened some of the hoops homeowners must jump through to cancel it.
If you put less than 20% down when you bought your home, your lender almost certainly required PMI.
The federal Homeowners Protection Act says your servicer must automatically cancel that insurance once your loan balance drops to 78% of the home's original value — based on your original payment schedule, regardless of how fast you've actually paid.
But you don't have to wait for the automatic cancellation.
You can request removal once your balance hits 80% of the original value.
And under updated Fannie Mae and Freddie Mac rules that took effect in recent years, lenders can now use a fresh appraisal to confirm your home's current value — not just the original purchase price.
In a market where values climbed sharply, that single change can knock years off your PMI timeline.
Start by finding your loan's original value and your current balance — both are on your monthly statement or servicer portal.
Then call your servicer and ask two questions: what's your current loan-to-value ratio, and what exactly do they require for PMI cancellation.
Most servicers will want one of three things: a written request from you confirming the loan is current, proof of payments (some borrowers need a good payment history over the past 12 to 24 months), and possibly a new appraisal.
That appraisal typically runs $400 to $700 out of pocket.
Run the numbers before ordering one — if you're only a few months from automatic termination, paying for an appraisal may not be worth it.
One catch that trips people up: the rules differ depending on whether your loan is conventional or backed by the FHA.
FHA loans come with mortgage insurance premiums that generally can't be canceled the same way — usually you'd need to refinance into a conventional loan to escape them.
If you're not sure which type you have, check your closing documents or ask your servicer directly.
If your loan is delinquent, most servicers will refuse a cancellation request until you're current.
And if you've taken a second mortgage or home equity line of credit, that can complicate the calculation.
When in doubt, a quick call beats a wrong assumption.
With mortgage rates still elevated and household budgets stretched by grocery and insurance costs, $150 or $200 back in your pocket each month matters.
It's one of the few line items on your housing bill you may be able to eliminate without selling, refinancing, or moving.
Our take: PMI removal is one of the most overlooked money moves in personal finance, mostly because nobody sends you a reminder.
Set a calendar alert for the month your balance crosses 80% of your original value, make the call, and ask for the requirements in writing.
The worst outcome is a ten-minute phone call.
Final Thoughts
The best is a permanently smaller mortgage payment.