Roughly 12 million American homeowners pay private mortgage insurance every month, and most have no idea when they're allowed to stop.
That extra line item usually runs between 0.3% and 1.5% of the original loan amount annually, which works out to $100 to $400 a month on a typical mortgage.
On a $350,000 loan, that's real money leaving your account for coverage that protects the lender, not you.
The good news: federal law gives you a clear path out, and it doesn't require refinancing.
The rule hinges on your loan type and your payment history.
For conventional loans, the Homeowners Protection Act says your servicer must automatically cancel PMI once you reach 78% loan-to-value based on the original purchase price and amortization schedule.
You can request cancellation earlier, at 80% LTV, but you have to ask in writing and meet the servicer's conditions.
You generally need a good payment history, meaning no payments 30 days late in the past 12 months and no payments 60 days late in the past 24 months.
You'll also need to certify that there are no junior liens on the property, like a second mortgage or HELOC, and you may need to provide evidence the home's value hasn't dropped.
That last point trips up a lot of people.
Rising home values don't automatically count.
If your equity comes from appreciation rather than paying down the balance, most servicers require a new appraisal before they'll drop PMI.
That appraisal costs $400 to $700 out of pocket, so run the math first: if you're paying $150 a month in PMI and the appraisal takes six weeks, you still come out ahead within a few months.
FHA loans follow different rules, which is where confusion runs highest.
Borrowers who put down less than 10% on an FHA loan generally keep mortgage insurance for the life of the loan.
The only way out is refinancing into a conventional loan once you have enough equity.
If you put down 10% or more, coverage ends after 11 years.
Timing your request correctly can save you thousands.
Servicers process PMI removal based on the date your balance hits the threshold, not the date you mail the letter.
Send your written request 30 to 60 days before you expect to cross 80% LTV, and include your loan number, a signed statement, and any documentation the servicer asks for.
Consumer complaints about PMI that wasn't canceled on schedule have climbed steadily, and the Consumer Financial Protection Bureau has taken action against lenders for failing to stop charging it.
Keep your own amortization schedule, compare it to your statements, and follow up in writing if the numbers don't match.
For anyone sitting on a low rate from 2020 or 2021, this is the rare money move that doesn't require giving up a cheap mortgage.
A quick call to your servicer plus a certified letter can cut your payment without touching your interest rate.
The takeaway: PMI isn't permanent, but it also isn't automatic in the ways most people assume.
Final Thoughts
Homeowners who track their own loan balance and act early tend to come out ahead, while those who wait for the servicer to notice often keep paying for months longer than necessary.