Mortgage servicers collected roughly $4 billion in private mortgage insurance premiums last year, and a meaningful slice of that money came from borrowers who no longer needed to pay it.
Once you have enough equity, you can usually cancel it — but only if you know the rules and ask.
Under federal law, your servicer must drop PMI on the date your loan balance is scheduled to hit 80% of the home's original value, provided your payments are current.
A second path opens at 78%, when cancellation becomes mandatory regardless of what you request.
The catch is the word "scheduled." Lenders use your original amortization table, not today's market value.
If home prices in your area jumped 30% since you bought, that appreciation doesn't speed up the automatic clock at all.
You have to file a request and pay for an appraisal to use it.
That request process is where most people leave money on the table.
For a conventional loan, you typically need a written request, a good payment history, and a current appraisal or broker price opinion.
On a $400,000 home with 20% equity, PMI often runs $150 to $300 a month.
Cancelling two years early can mean $3,600 to $7,200 back in your pocket.
On most FHA mortgages with less than 10% down, the mortgage insurance premium lasts the entire life of the loan.
The only escape is refinancing into a conventional loan once you have enough equity.
That's a real cost worth calculating, especially if rates have moved in your favor.
Requirements vary by loan type and servicer.
VA loans don't carry monthly PMI, though they do have a one-time funding fee.
USDA loans charge an annual fee that works differently.
And if you've missed payments, most servicers will deny a request outright — on-time history is non-negotiable for the borrower-initiated route.
Start by finding your original home value and loan balance on your statement, then check your servicer's cancellation page for the exact forms.
If home values have climbed in your area, a new appraisal can unlock equity you didn't know you had.
If values have fallen, the automatic 80% date still applies, so mark it on your calendar.
One more thing worth knowing: you can request cancellation once you hit 80% based on the original value, but servicers can require you to wait two to five years after closing before they'll consider it.
Read your loan documents or call and ask directly.
Final Thoughts
A ten-minute phone call has saved homeowners thousands.