Private mortgage insurance (PMI): what it is and how to remove it
PMI protects the lender, not you, when you put less than 20% down on a conventional loan. Federal law sets when it can end.
Sourced from official pages · Updated September 30, 2026💡 Key takeaways
- PMI is usually required on conventional loans with less than 20% down and protects the lender.
- You can request cancellation when your balance is scheduled to reach 80% of the original value, if you meet conditions.
- It must end automatically at 78% if you are current on payments.
- FHA loans use a different mortgage insurance system.
What PMI is
Private mortgage insurance is usually required on a conventional mortgage when your down payment is less than 20% of the home’s value. It protects the lender if you stop paying. You typically pay it as part of your monthly payment.
When PMI ends
- You can request cancellation when your loan balance is scheduled to reach 80% of the original home value, if you are current and meet the lender’s conditions.
- It must end automatically when your balance is scheduled to reach 78% of the original value, if you are current on payments.
- Rules differ for FHA loans, which have their own mortgage insurance premium.
How to plan for it
Ask each lender for the PMI cost in your Loan Estimate, and compare a larger down payment with paying PMI. Our mortgage calculator includes a PMI field so the total monthly payment reflects it.
Ways to avoid or shorten PMI
- Put down 20% or more.
- Pay extra principal to reach 80% sooner.
- Ask the lender about lender-paid PMI (which usually means a higher rate).
- Request cancellation as soon as you qualify.
Estimating the cost
PMI varies by credit score, down payment and loan type. Ask lenders for the monthly amount on your Loan Estimate, then enter it in the PMI field of the mortgage calculator.
🔤 Key terms
| Term | Meaning |
|---|---|
| PMI | Private mortgage insurance, usually required with less than 20% down on conventional loans |
| Automatic termination | PMI must end when the balance is scheduled to reach 78% of the original value if you are current |
| Borrower-requested cancellation | You can ask to cancel at 80% if you meet conditions |
| Lender-paid PMI | PMI paid by the lender in exchange for a higher rate |
Steps to remove PMI
- Check your loan balance against the original home value.
- Ask your servicer for their cancellation requirements.
- Submit a written request when you reach 80%.
- If the servicer needs an appraisal, ask who pays and the cost.
⚠️ Common mistakes to avoid
- Paying PMI for years after you have enough equity.
- Not tracking your balance against the original value.
- Assuming PMI and FHA mortgage insurance work the same way.
- Ignoring PMI when comparing a smaller down payment to a larger one.
🛠️ Try it yourself
❓ Frequently asked questions
When can I remove PMI?
You can request cancellation at 80% of the original value under the CFPB conditions; it ends automatically at 78% if you are current.
Does PMI protect me?
No, it protects the lender.
Is PMI tax deductible?
Deductibility depends on current tax law; check IRS guidance.
Is FHA mortgage insurance the same?
No; FHA has its own premium rules.
📚 Sources
This guide is general information, not financial, tax or legal advice. Rules and limits change; confirm with the sources above or a licensed professional.