If you bought a home in the last few years with less than 20 percent down, there's a decent chance you're paying hundreds of dollars a month for insurance that protects your lender, not you.
Private mortgage insurance, or PMI, typically costs between 0.3 percent and 1.5 percent of your loan amount annually.
On a $350,000 mortgage, that's roughly $87 to $437 extra every single month.
The good news is that PMI doesn't have to stick around forever.
The bad news is that lenders have little incentive to remind you when it can go away.
Under federal law, your servicer must automatically cancel PMI once your loan balance drops to 78 percent of the home's original value, based on your original amortization schedule.
You can request cancellation once you hit 80 percent loan-to-value, and that can happen years earlier if you've made extra payments or your home has appreciated.
The catch is that most homeowners never pick up the phone.
A 2024 analysis by Consumer Financial Protection Bureau researchers found that a meaningful share of borrowers keep paying PMI well past the point where they could have asked for removal, often because they simply don't know the rules.
Divide your remaining balance by your home's current value.
If you're at or below 80 percent, call your servicer and ask about PMI removal in writing.
Many lenders require a new appraisal, which can run $400 to $700, though some accept a broker price opinion or a desktop valuation for less.
If your home has appreciated since you bought it, that appraisal can pay for itself in a few months.
There are a few hoops worth knowing about.
Your payment history usually needs to be current, with no more than one 30-day late payment in the past year and none in the past two.
If your loan is FHA-backed, the rules are stricter: loans originated after mid-2013 generally keep mortgage insurance for the life of the loan unless you refinance into a conventional mortgage.
That FHA detail trips up a lot of people.
If you put 3.5 percent down on an FHA loan in 2021, you may be stuck paying annual mortgage insurance premiums for years unless you refinance.
Run the math on whether a refi at today's rates saves more than the insurance costs you'd shed.
Investors and second homes play by different rules too, and lenders can impose their own overlays on top of federal minimums.
If your servicer pushes back, ask for the specific investor guidelines in writing.
For anyone sitting on a mortgage from 2020 through 2022, this is worth an afternoon of paperwork.
A single phone call plus an appraisal could free up $100 to $400 a month, and that money compounds if you redirect it toward the principal or a high-yield savings account.
Our take: PMI removal is one of the few genuinely boring personal finance moves that pays off fast.
Lenders won't chase you down to stop collecting a fee, so set a calendar reminder, check your loan-to-value ratio twice a year, and make the call.
Final Thoughts
It's your money, and nobody else is watching it for you.