Millions of American homeowners are paying private mortgage insurance every month without realizing they may already qualify to have it removed.
PMI typically costs between 0.5% and 1.5% of the original loan amount annually, which on a $350,000 mortgage runs roughly $145 to $437 extra every month.
For households already stretched by grocery bills and insurance premiums, that's real money quietly leaving the budget.
The catch is that removal isn't automatic.
Under the Homeowners Protection Act, your servicer must cancel PMI once you reach 22% equity based on the original amortization schedule, but that only happens if your payments are current and you've never let the loan go delinquent.
If you want it gone sooner, at the 20% mark, you have to ask in writing, and the request has specific requirements that trip up a lot of borrowers.
Lenders generally look at either your original home value or a new appraisal, and the difference matters enormously in a market where values have swung wildly since 2021.
If you bought with 10% down and your market has climbed, a fresh appraisal could push you past 20% equity years ahead of schedule.
But if you're in a market that cooled, the original purchase price may be your only path, and that takes longer.
Most servicers require no 30-day late payments in the past 12 months and no 60-day lates in the past 24 months.
A single slip during a rough stretch can reset your eligibility clock, even if you've since caught up.
This rule catches people who assume a one-time hardship won't matter.
Third, you may need to prove the home still holds its value.
Some servicers accept a broker price opinion, which is cheaper than a full appraisal, while others insist on a licensed appraisal.
Costs typically run $150 to $700, and you generally pay upfront whether or not the request is approved.
Ask which valuation method your servicer accepts before spending anything.
Fourth, there's the question of loan type.
Conventional loans follow the federal rules, but FHA loans work differently.
FHA mortgage insurance premiums often last the life of the loan if you put down less than 10%, and the only real exit is refinancing into a conventional loan.
That's a crucial distinction for the millions of FHA borrowers who assume their MIP will drop off like PMI.
Requests usually need to be in writing, sometimes through a specific portal or address, and servicers are not required to volunteer that you've hit the threshold.
Consumer advocates regularly report that borrowers who call and ask get told different things than what the statute requires.
Keeping a dated copy of every request and following up in writing protects you if the timeline slips.
The practical takeaway: check your loan balance against your original value today, review the last two years of payment history, and call your servicer to ask exactly what their removal process requires.
If the numbers work, the savings can be substantial, often hundreds of dollars a month for years.
If you're in an FHA loan, run the refinance math instead, because waiting for automatic removal may never come.
The bottom line is that PMI removal rewards borrowers who pay attention and penalizes those who assume the system will handle it for them.
Servicers have little incentive to speed up a process that cuts their revenue, so treat this as your responsibility, not theirs.
Final Thoughts
A few hours of paperwork could be one of the highest-paid tasks on your calendar this year.