How to Get Rid of PMI Fast: When You Can Drop It and How to Qualify

The exact timing of when private mortgage insurance (PMI) goes away depends on your loan type, amount, and what home values are in your area. For most conventional loans, PMI is automatically removed when your loan balance reaches 78% of the home’s original value (22% equity), or you can request removal at 80% (20% equity). If your home’s value has increased, you can also refinance or request early removal based on a new appraisal.

We’ll walk you through how to get rid of PMI on every type of loan and other steps to take to get rid of mortgage insurance sooner so you can spend more money on building equity instead of paying fees.

🧠 Expert tip: If you’re thinking about getting rid of PMI because you’re buying or selling a home, we recommend starting with Clever Real Estate. You can sell for just 1.5% commission and get up to $500 cash back when you buy with a Clever agent. Fill out a quick form to get your free agent matchces from Clever.

When does PMI go away?

There are a few different circumstances when PMI goes away on a mortgage. Depending on your loan type and home value, some of them happen automatically while others require you to take some action before it can be dropped. Here are some of the scenarios when PMI goes away:

• You can request PMI removal when you hit 20% equity: Once you’ve paid down enough of your mortgage balance and reached at least 80% loan-to-value (LTV), meaning you own 20% equity in your home, you can contact your lender and request that they remove PMI from your payment. As long as you meet certain conditions and have been reliable with your payment, they’ll generally grant your request.
• PMI drops automatically when you reach 22% equity: According to the law, your lender must cancel PMI when your balance reaches 78% of your original home value, provided that you’re current on your payments.
• There is a midpoint automatic cancellation: If you haven’t already dropped PMI and you have a 30-year mortgage, your PMI must drop after 15 years of on-time payments, regardless of whether you’ve built enough equity or not.
• You can request a new appraisal if your home value increases: If you live in an area where home values are always going up, you can reach 20% equity faster. If your property’s value goes up, you can get rid of PMI early by getting a new appraisal. Some caveats are that lenders usually like to see 2 years of on-time payments and sometimes up to 5 years of on-time payments if most of your equity is coming from rapid home appreciation.

How to get rid of PMI (step-by-step)

Here’s a step-by-step guide on how to get rid of PMI.

1. Check your current loan balance and home value.

Your home could reach 20% equity sooner than scheduled if its value increases. To estimate your equity, find your current mortgage balance and compare it to your home’s current market value.

You can use a few different home value estimators to get an idea of where it might be at, although keep in mind that lenders will only take a professional appraisal as proof of your home’s value. Subtract your loan balance from your home value to get your equity amount, then divide that by your home value to get your equity percentage. 

If you’re close to 20%, you can order a professional appraisal to confirm your home’s value and request PMI removal from your lender. Just keep in mind that appraisals typically cost between $300 and $500, so you only want to order one if you’re confident it will be worth the money by helping you remove PMI from your monthly payment.

2. Make extra mortgage payments on your principal if you need to.

If you’re close to hitting 20% equity, consider adding a few hundred dollars a month toward your principal to get your private mortgage insurance removed sooner. This can help you reach the 80% LTV sooner, which lets you request for PMI removal.

You can set this up with your lender, usually through the online payment portal. Just make sure you specify that you want all of the extra payment to go toward your principal. Otherwise the lender might put some toward interest, which won’t help you reach 20% equity.

3. Contact your lender with documentation.

Once you’re sure you’ve hit 20% equity, contact your lender for PMI removal. They’ll usually require a written request to cancel PMI, proof of your home’s current value, a good payment history, and no secondary liens on the property.

4. Continue making PMI payments until you get confirmation.

Keep making regular payments until your lender confirms PMI has been removed. It won’t disappear automatically unless you hit the 78% threshold of your home’s original value when you purchased it.

How to get rid of PMI for different types of mortgages

Get rid of PMI on conventional loans

PMI on conventional loans is usually the most straightforward to remove. You can request for cancellation once you reach 20% equity or wait for automatic removal at 22% equity. You also have the option for early removal if your home’s value rises and you can prove that with an appraisal.

Get rid of PMI on FHA loans

FHA loans work differently. Instead of PMI, they come with a mortgage insurance premium (MIP), which could last for the entirety of the loan depending on how much of a down payment you make in relation to your home’s value when you purchase it. If your down payment was less than 10% of your home’s value, you’ll pay MIP over the life of the loan. And if your down payment was 10% or more, you can stop paying MIP after 11 years.

To remove FHA mortgage insurance entirely, the best option is to refinance into a conventional loan. You can also refinance into an FHA loan with different terms, but it generally will save you more on interest and fees to refinance into a conventional loan. 

USDA loans

USDA loans don’t have PMI, but they do charge an annual guarantee fee. The fee usually lasts for the life of the loan unless you refinance into a conventional mortgage. The annual fee accrues based on the remaining loan balance, so it decreases slightly over time if the principal is paid down.

VA loans

VA loans are available to eligible active-duty service members, veterans, and surviving spouses. They do not require PMI but do charge a one-time VA funding fee, which can be rolled into the loan. The funding fee varies based on your down payment, whether it’s your first VA loan, and your service type. Veterans with service-connected disabilities are exempt from the fee.

How to get rid of PMI if your home value increases

Let’s say you bought your home for $350,000 with a 10% down payment. That means your original loan is $315,000. Two years later, your home is now worth $400,000, thanks to the rising property values in your area.

Assuming you’ve been making on-time payments and now owe about $305,000 on your loan, your home equity would be $95,000. That’s 23.7% of your home’s current value, meaning you’ve crossed the 20% threshold and can request for PMI removal. 

In this case, you’d pay for a new appraisal to prove your home’s higher value, then submit it to your lender as part of your cancellation request.

How to get rid of PMI without refinancing

If you want to get rid of PMI without refinancing, talk to your lender about your options and different strategies you could use. Many homeowners think refinancing is the only way to remove PMI but there are several alternatives. But you can get rid of PMI without refinancing by requesting cancellation from your lender once you’ve reached 20% equity and have an appraisal proving that your equity is 20% of your home’s current value. 

That said, here are scenarios where refinancing generally makes sense as the best way to remove PMI:

• Interest rates have dropped significantly from when you purchased your home, and you want a lower rate.
• Your home value has increased significantly.
• You have an FHA loan with permanent MIP. Refinancing into a conventional loan with at least 20% equity will allow you to not pay MIP for the life of the loan and not pay PMI on the conventional loan.

What PMI actually costs you

For conventional mortgages, PMI typically ranges from 0.2% to 2% of the total loan amount per year. Then that amount is broken into monthly payments that are part of your mortgage.

Let’s say you buy a $350,000 home with a 10% down payment ($35,000). You’d have a $315,000 loan. With a typical PMI rate of 0.2%-2%, you’re paying:

• Low end (0.2%): $630 annually or $52.5 monthly
• High-end (2%): $6,300 annually or $525 monthly

Those numbers can really add up when you pay them for years over the life of the loan. That’s why it’s always ideal to put down a 20% down payment or get PMI removed from your loan as soon as possible.

Lower your payments by getting rid of PMI

Getting rid of PMI is one smart way to lower your monthly mortgage payments. Understanding when you can drop PMI can save you thousands of dollars. Once you reach 20% equity in your home or are halfway through your loan, you can cancel PMI. If you can’t wait for this, you can make extra payments toward your principal to build equity faster or get an appraisal if you think your home’s value has gone up. Finally, you can refinance your mortgage to get rid of PMI and take advantage of lower interest rates.