If your monthly mortgage statement has a line item that feels like it's just burning money, you're not imagining it.
Private mortgage insurance, or PMI, typically costs between 0.2% and 2% of your loan amount each year.
On a $350,000 home, that can run $60 to $580 extra every month — money that protects your lender, not you.
Federal law gives most homeowners a clear path to remove it, and with home values still elevated in many markets, a lot of people can ditch it sooner than they think.
Here's what actually has to happen. **The automatic removal rule** Under the Homeowners Protection Act, your servicer must cancel PMI automatically once you reach 22% equity based on the original home value and your original payment schedule.
If you're current on payments, that cancellation should happen without a fight.
But 22% on the original schedule can take years.
Most people don't want to wait that long. **The request route** You can ask for PMI cancellation once you hit 20% equity, also based on the original value.
Requests generally need to be in writing, and servicers can require a good payment history, no liens on the home, and sometimes a new appraisal — which you may have to pay for out of pocket.
This is where the current market gets interesting.
If you bought in 2020 or 2021 with a small down payment and your area has since seen strong appreciation, you might be sitting on 20% equity already, even if you've barely paid down the principal.
A $30,000 home value increase on a $300,000 purchase can move the needle fast. **Watch the seasoning rules** Many loans require PMI to stay in place for at least two years, sometimes five, before cancellation is allowed at all.
FHA loans work differently — if you put down less than 10%, that mortgage insurance usually lasts the life of the loan unless you refinance out of it.
That's a big deal, and it's why lenders sometimes nudged borrowers toward FHA without explaining the long tail. **What it costs to find out** An appraisal for PMI removal often runs $400 to $700.
If you're paying $200 a month in PMI, the appraisal pays for itself in about three months.
If you're paying $40, it may take closer to two years — still worth it, but know the timeline going in. **The moves worth making** Call your servicer and ask two questions: what's my current loan-to-value based on the original value, and what exactly do I need to submit?
Then check whether your loan is conventional or FHA, because the rules are genuinely different.
Finally, if you're close but not quite at 20%, consider whether a small extra principal payment each month gets you there faster — every dollar toward principal is a dollar not spent on insurance.
One more thing: keep an eye on your escrow statement.
PMI sometimes hides in there, and servicers don't always remove it on time.
If you hit the threshold and it's still showing up, escalate in writing and cite the Homeowners Protection Act. **The bottom line** PMI removal isn't glamorous, but it's one of the few household money moves with a clear finish line.
Know your equity number, know your loan type, and make the call.
Final Thoughts
A 15-minute phone conversation could free up a couple hundred dollars a month — and that's real money in a year when everything else keeps getting more expensive.