How to Remove PMI in 2026: The Exact Steps and LTV Thresholds

Private mortgage insurance (PMI) on a conventional loan isn't permanent, and you don't need to refinance to get rid of it. The rules are federal law (the Homeowners Protection Act), which means your servicer has to follow them whether they want to or not. Here's exactly how it works.

Two paths off PMI: automatic and requested

Automatic termination happens by law once your loan balance hits 78% of the original value of the property (the lesser of the purchase price or the appraised value at origination), as long as you're current on payments. Your servicer is required to cancel PMI on the date the balance is scheduled to reach 78% under the original amortization schedule — no request needed, no appraisal needed. If you're behind on payments when that date arrives, cancellation happens once you're current.

Borrower-requested cancellation can happen earlier, once your loan balance reaches 80% of the original value. You have to request it in writing, you need a good payment history (current, and no 30-day-late payment in the past 12 months, no 60-day-late in the past 24), and your servicer can require a new appraisal to confirm the property hasn't declined in value if you're using current value instead of original value to get there faster.

Getting there faster than scheduled

Two things move your date up: extra principal payments and home value appreciation.

• Extra principal payments. Every dollar of extra principal shrinks your balance and pulls the 80%/78% thresholds closer. Even an extra $100-$200/month on a $350,000 loan can shave a year or more off your PMI timeline.
• Appreciation-based reassessment. If your home's value has risen — common in many 2026 markets given continued price growth — you can request cancellation based on current value rather than waiting for amortization to grind down the balance relative to the original price. This requires a new appraisal (you typically pay for it, $400-$700) and the LTV based on that new appraisal has to be 80% or better for standard cancellation, or sometimes a stricter threshold (75%) if it's within the first two years of the loan — check your servicer's specific policy.

The request letter: what to include

Send this in writing (email is usually fine if your servicer has a portal, but a paper trail matters). Include:

• Your loan number and property address
• A clear statement: "I am requesting cancellation of private mortgage insurance under the Homeowners Protection Act."
• Whether you're requesting cancellation based on scheduled amortization (original value) or current value (attach recent comps or request their appraisal process)
• Confirmation you have no outstanding liens beyond the first mortgage that would block cancellation

What can block cancellation even at 80% LTV

• A late payment in the past 12 months (30+ days) or two late payments in the past 24 months (60+ days)
• A second mortgage or home equity line that pushes your combined LTV above the threshold
• Certain high-risk loan classifications where the servicer applies a stricter LTV requirement (check your loan documents — this is rare but worth ruling out)

FHA loans: a different, harder rule

This process is specific to conventional loans with private mortgage insurance. FHA mortgage insurance premium (MIP) does not follow the same 78%/80% cancellation rule. If your FHA loan started with less than 10% down, MIP typically lasts for the life of the loan — the only way off is refinancing into a conventional loan once you have enough equity and a strong enough credit profile. If you put down 10% or more on an FHA loan, MIP cancels after 11 years automatically. See our FHA vs. conventional comparison for the full mortgage insurance math.

Should you refinance to drop PMI instead?

Sometimes, but do the math first. Refinancing has closing costs (typically 2%-5% of the loan amount) and resets your rate to current market pricing, which may be higher or lower than your existing rate depending on timing. If you're within a year or two of hitting 80% LTV naturally, paying for a new appraisal and requesting cancellation is almost always cheaper than a full refinance. Refinancing makes more sense when you're also trying to drop your interest rate significantly, not just to shed PMI.

Quick math: what PMI removal is worth

On a $320,000 loan balance with 0.6% annual PMI, you're paying about $160/month — $1,920/year. If a new appraisal costs $500 and gets you there a year early, that's a clean $1,420 net benefit in year one alone, plus every month after that you keep the full $160. Run the numbers on your specific loan with the Affordability Calculator, or paste your listing details into the Listing Analyzer when you're still shopping to see how mortgage insurance affects your PITI from day one.

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