Millions of American homeowners are paying for private mortgage insurance they no longer need, and many of them don't realize they can do something about it.
PMI typically costs between 0.3% and 1.5% of your original loan amount every year, which on a $350,000 mortgage can mean an extra $100 to $400 tacked onto your monthly payment.
The catch is that lenders don't automatically cancel it the moment you qualify—you usually have to ask.
The rules around that request are clearer than most people assume.
Under the Homeowners Protection Act, your lender must drop PMI once you reach 22% equity based on the original value of your home and your original payment schedule, no request needed.
But the more useful threshold comes earlier: at 20% equity, you can request removal yourself, and that's where the real savings kick in.
Meeting the 20% mark doesn't happen on a fixed timeline—it depends on your loan type, your down payment, and whether you've made extra payments.
A borrower who put 10% down on a 30-year fixed loan typically hits that point in about four to five years of standard payments.
Someone who put 5% down waits much longer unless they accelerate.
The fastest path for many households is a current market appraisal rather than the original purchase price.
If home values in your area climbed since you bought, you may already sit above 20% equity on paper even if your loan balance hasn't moved much.
Fannie Mae and Freddie Mac-backed loans generally allow this approach, though most conventional lenders will require a professional appraisal, which runs roughly $400 to $700 depending on your market.
If your loan originated after June 2013 with less than 10% down, that mortgage insurance premium sticks around for the life of the loan unless you refinance into a conventional product.
That single detail has pushed thousands of FHA borrowers toward refinancing in recent years, even when their rate wasn't dramatically lower.
The paperwork itself is rarely the hard part.
Lenders want a written request, proof you're current on payments, and often evidence of no second liens or missed payments in the prior 12 to 24 months.
A few still send borrowers through a runaround, which is why consumer advocates push people to submit requests in writing and keep copies.
If your servicer denies the request, they owe you a written explanation.
Disputes can be escalated to the Consumer Financial Protection Bureau, and complaints filed there tend to get answered faster than a phone call to a call center ever will.
Our take: PMI removal is one of the few money moves in housing that delivers a guaranteed monthly savings once approved, with no downside beyond the appraisal fee.
If you've been in your home for several years and put less than 20% down, dig out your loan documents this week and check where your equity actually stands.
Final Thoughts
The money is already yours—you just have to claim it.