Millions of American homeowners are quietly handing over an extra $100 to $300 every month, and many of them don't have to.
It's called private mortgage insurance, or PMI, and it gets tacked onto conventional loans when buyers put down less than 20 percent.
The good news: there are clear, written rules for getting rid of it — and most borrowers never bother to check whether they qualify.
PMI exists to protect the lender, not you.
If you default, the insurer covers part of the bank's loss.
That's why it disappears automatically once you've built enough equity, usually at 22 percent based on your original home value and amortization schedule, regardless of what the market does.
At that point, federal law requires your servicer to cancel it — no phone call needed.
But the faster path is requesting removal at 20 percent equity, and this is where homeowners leave real money on the table.
You can hit that threshold two ways: paying down the balance or watching your home's value climb.
In hot markets, a new appraisal often does the trick years earlier than scheduled.
A $500 appraisal that kills a $200 monthly premium pays for itself in under three months.
The catch is that servicers don't advertise this.
You generally need to be current on payments, have a good payment history, and submit a written request.
Many lenders also require a broker's price opinion or full appraisal to confirm the home's value.
If you've made major improvements or your neighborhood has boomed, that documentation can be the difference between paying PMI for another four years or ending it this quarter.
If your loan is FHA-backed, different rules apply, and removal often requires refinancing entirely.
If you've had late payments or the loan is considered high-risk, a servicer can push back.
And once you cross 22 percent by the original schedule, cancellation is mandatory — so if your lender keeps charging after that, you have grounds to demand a refund.
The simplest first step costs nothing: pull your latest mortgage statement, find the PMI line, and call your servicer to ask exactly what's required.
Then run the math on whether an appraisal is worth it.
For a lot of households, this single phone call is worth more than a year of coupon clipping.
Our take: PMI removal is one of the few financial wins that's purely a matter of paperwork and timing.
Lenders have no incentive to remind you, so the burden falls on you.
Final Thoughts
Set a calendar reminder to review your equity every year — it's the closest thing to free money in a tight budget.