Private mortgage insurance is the line item on a mortgage statement that quietly drains hundreds of dollars a month, and a surprising number of homeowners keep paying it long after they've earned the right to stop.
Lenders don't always send a loud reminder that you've crossed the threshold.
In many cases, the burden falls on you to ask.
On a conventional loan, you can typically request PMI cancellation once your loan balance drops to 80 percent of the home's original value.
That's based on the value at purchase, not today's market.
If you put down 10 percent, you're waiting years.
Under federal law, servicers must cancel PMI on their own once you reach 78 percent loan-to-value based on the original schedule, as long as you're current on payments.
That backstop exists so borrowers aren't stuck paying forever.
But it can arrive months after you could have asked.
The gap between 80 and 78 percent is where money gets left on the table.
Reaching 80 percent lets you initiate the request.
Waiting for the lender to act at 78 percent means you may have paid extra premiums you didn't owe.
You generally need a good payment history, no missed payments in the recent past, and proof the home still holds its value.
Some servicers require a current appraisal or a broker price opinion, and you may foot the bill.
That cost can run a few hundred dollars, so it's worth running the math before scheduling one.
If your home has appreciated sharply, a new appraisal can work in your favor.
Say you bought for $300,000 with 10 percent down, and the home now appraises at $400,000.
Your loan-to-value can fall below 80 percent almost overnight.
That's a legitimate path to dropping PMI years early, and it's one of the most overlooked moves in household budgeting.
If you put down less than 10 percent, PMI typically lasts the life of the loan unless you refinance into a conventional product.
That's a key reason some FHA borrowers look at refinancing once they've built equity.
Check your latest statement or call your servicer to confirm your current loan-to-value and your PMI cancellation date.
Ask in writing what the specific requirements are.
Track your amortization schedule so you know when you hit 80 percent.
And if you're close but not quite there, consider whether extra principal payments speed up the timeline.
Also watch for the annual notice your servicer is required to send about PMI termination.
It's easy to skim past, but it spells out your rights and the contact info you need.
Our take: PMI isn't a scam, but it is a fee you should treat as temporary rather than permanent.
Set a calendar reminder, ask your servicer directly, and don't assume the bank will do you any favors.
Final Thoughts
The money you save on premiums is real, and it usually takes one phone call to start the process.