If you bought a home in the last few years with less than 20 percent down, there's a decent chance you're paying private mortgage insurance every single month without thinking about it.
PMI typically runs between 0.3 percent and 1.5 percent of your loan amount annually, which on a $350,000 mortgage can mean $100 to $400 extra per month.
That's real money that could be going toward groceries, a car payment, or your emergency fund.
The good news is that PMI isn't permanent, and there are specific rules for getting rid of it.
The most common path is requesting removal once you hit 20 percent equity in your home.
Under federal rules for conventional loans, your lender must cancel PMI at your request when your loan-to-value ratio reaches 80 percent based on the original home value, as long as you're current on payments.
You'll usually need to submit a written request, and many lenders want proof — often a new appraisal that you pay for, typically $400 to $700.
Some lenders will accept a broker price opinion or automated valuation instead, which costs less.
There's also a second deadline most homeowners never hear about.
Once you reach 22 percent equity based on your original value and payment schedule, servicers must automatically terminate PMI — no request, no appraisal, no phone calls required.
That automatic cutoff is based on the original amortization schedule, not on how fast home prices have climbed.
So if your neighborhood got hot and your home value jumped, you might be able to cancel much sooner by requesting it rather than waiting for the automatic date.
Timing matters more than most people realize.
If you put 10 percent down, you'll hit that 20 percent equity mark faster than someone who put 5 percent down, and a shorter loan term speeds things up too.
Extra principal payments can move your cancellation date forward by months or years.
On the flip side, missed payments can delay everything — most lenders require a clean payment history before approving a removal request.
If your FHA loan started after June 2013 and you put down less than 10 percent, that mortgage insurance premium typically lasts the life of the loan unless you refinance into a conventional mortgage.
That's a big reason some FHA borrowers look at refinancing once they've built enough equity — though closing costs and today's rates need to make the math work.
Your lender may require the appraisal to come in at a value that supports the 80 percent threshold, and if it doesn't, you're out the appraisal fee and stuck waiting.
Some loans, especially certain jumbo or portfolio products, have their own investor-specific rules that differ from the standard guidelines.
And if you've had a forbearance or modification, extra conditions may apply.
The simplest first step costs nothing: call your servicer and ask three questions.
What's my current loan-to-value ratio, what's my PMI cancellation date, and what exactly do you need from me to remove it?
Then decide whether an appraisal is worth the cost based on what you owe and what your home is likely worth today.
Our take: PMI is one of the few household expenses you can often eliminate with a phone call and some paperwork, so it's worth an hour of your time.
If the numbers say you're close, paying for an appraisal can pay for itself within a few months.
Final Thoughts
Just don't assume your servicer will volunteer the information — you usually have to ask.