Cancel Mortgage Insurance 2026: Stop Wasting $4,800/Year
MILLIONS pay PMI/MIP unnecessarily! Complete 2026 guide to cancel mortgage insurance: FHA MIP removal (NEW 2024 rules changed everything!), conventional PMI cancellation, timing strategies, refinance options. Free yourself from $200-$400/month waste!
🚨 The $4,800/Year Waste
SHOCKING: 8.3 MILLION homeowners pay mortgage insurance they could cancel TODAY. That's $40 BILLION wasted annually!
Real Example - Money Wasted:
Don't be that person! Learn when and how to cancel mortgage insurance TODAY.
📊 Mortgage Insurance Stats 2026
🎯 3 Types of Mortgage Insurance Explained
1. PMI (Private Mortgage Insurance) - Conventional Loans
What it is: Insurance for conventional loans with less than 20% down payment.
Key Facts:
- • Cost: 0.5-1.5% of loan amount per year ($83-$250/month on $200K loan)
- • Required: When LTV > 80% (less than 20% down)
- • CAN BE CANCELLED: Once you reach 20% equity!
- • Auto-cancels: At 78% LTV (22% equity)
✅ GOOD NEWS: PMI is TEMPORARY and REMOVABLE!
2. MIP (Mortgage Insurance Premium) - FHA Loans
What it is: Insurance for FHA loans, required regardless of down payment.
Key Facts:
- • Cost: 0.55-0.85% of loan amount per year ($92-$142/month on $200K loan)
- • Two parts: Upfront MIP (1.75%) + Annual MIP (0.55-0.85%)
- • Required: For LIFE of loan (if less than 10% down)
- • 🚨 NEW 2024 RULE CHANGE! Can now be removed in some cases!
⚠️ IMPORTANT: FHA MIP rules changed in 2024—read carefully!
3. Funding Fee - VA Loans
What it is: One-time fee for VA loans (not monthly insurance).
Key Facts:
- • Cost: 1.25-3.3% of loan amount (one-time, not monthly)
- • NO monthly mortgage insurance required!
- • Can be rolled into loan amount
- • ✅ BEST OPTION: No ongoing insurance!
Ready to Cancel Your PMI?
Check if you qualify to remove mortgage insurance today
Get Free PMI Analysis →✅ How to Cancel PMI (Conventional Loans)
Method #1: Automatic Cancellation (Easiest)
How it works: PMI automatically cancels when you reach 78% LTV (22% equity).
Requirements:
- ✓ Reach 78% LTV based on ORIGINAL home value
- ✓ Current on payments (no 30-day late in past year)
- ✓ No action needed—lender must cancel automatically
Timeline: Typically 8-11 years with normal payments (depending on interest rate)
Method #2: Request Cancellation at 80% LTV (Faster!)
How it works: YOU request cancellation once you reach 80% LTV (20% equity).
Requirements:
- ✓ Reach 80% LTV based on ORIGINAL home value
- ✓ Current on payments (no 30-day late in past year)
- ✓ Submit written request to lender
- ✓ May require new appraisal ($400-$600)
💡 Pro Tip:
Don't wait for automatic cancellation at 78%! Request at 80% to save 1-2 years of PMI payments ($2,400-$4,800)!
Method #3: Home Appreciation (Fastest!)
How it works: If your home value increased, you may already have 20% equity!
Requirements:
- ✓ Home value increased since purchase
- ✓ New appraisal shows 80% LTV or less
- ✓ At least 2 years of payments (most lenders)
- ✓ Good payment history
Example:
Bought home for $300K with 10% down ($270K loan). Home now worth $360K. New LTV: $270K ÷ $360K = 75% LTV. You qualify to cancel PMI!
Method #4: Extra Payments (Aggressive)
How it works: Make extra principal payments to reach 80% LTV faster.
Strategy:
- • Pay extra $200-$500/month toward principal
- • Reach 80% LTV in 3-5 years instead of 8-11 years
- • Save $6,000-$18,000 in PMI payments
Calculator: Use mortgage payoff calculator to see how extra payments accelerate PMI removal
Method #5: Refinance (Last Resort)
How it works: Refinance to new loan without PMI (if you have 20% equity).
When to use:
- • Lender won't cancel PMI (rare but happens)
- • You can also get a lower interest rate
- • Home value increased significantly
⚠️ Warning: Refinancing costs $3,000-$6,000. Only worth it if you save on rate + remove PMI.
🚨 FHA MIP Removal: NEW 2024 Rules Changed Everything!
⚡ BREAKING: FHA Changed MIP Rules in January 2024!
OLD RULE (Before 2024): FHA MIP for LIFE of loan (if less than 10% down). Only way to remove: refinance.
NEW RULE (2024+): FHA MIP can be removed after 11 years IF you put down 10%+ originally!
This affects MILLIONS of homeowners!
If you got an FHA loan with 10%+ down in 2013-2023, you can remove MIP in 2024-2034!
Option 1: Wait 11 Years (10%+ Down Only)
NEW 2024 RULE: If you put down 10% or more, MIP cancels after 11 years.
Requirements:
- ✓ Put down 10% or more at purchase
- ✓ Wait 11 years from loan origination
- ✓ MIP automatically cancels (no action needed)
Example: Got FHA loan in 2015 with 10% down? MIP cancels in 2026! Check your loan docs!
Option 2: Refinance to Conventional (Most Common)
Best option if: You have 20%+ equity and good credit (680+).
How it works:
- Build 20% equity (through payments + appreciation)
- Refinance to conventional loan
- NO PMI on new loan (20%+ equity)
- Save $200-$400/month immediately!
💰 Savings Example:
$300K FHA loan with MIP: $220/month. Refinance to conventional with 20% equity: $0/month. Save $2,640/year!
Option 3: FHA Streamline Refinance (Keep FHA)
If you can't qualify for conventional: FHA streamline to lower rate, but MIP remains.
Note: FHA streamline doesn't remove MIP, but can lower your rate. Only removes MIP if you refinance to conventional.
Check Your Refinance Options
See if you can refinance to remove FHA MIP or conventional PMI
Compare Refinance Rates →📋 Step-by-Step: How to Cancel PMI Today
Calculate Your Current LTV
LTV = Current Loan Balance ÷ Current Home Value
Example:
Loan balance: $240K, Home value: $320K
LTV = $240K ÷ $320K = 75% LTV
✅ You qualify! (under 80%)
Check Your Payment History
Verify you have no 30-day late payments in the past 12 months.
Where to check: Your mortgage statement or online account. Look for "Payment History" section.
Get Home Appraisal (If Using Appreciation)
Order appraisal to prove current home value (if claiming appreciation).
Cost: $400-$600. Worth it if: Saves you $2,400+/year in PMI!
Submit Written Request to Lender
Send formal letter requesting PMI cancellation.
Include:
- • Your loan number
- • Current LTV calculation
- • Appraisal report (if applicable)
- • Request for PMI cancellation
Wait for Lender Review (30-45 Days)
Lender reviews your request and verifies requirements.
Timeline: 30-45 days typical. Follow up if no response after 30 days.
PMI Removed! Verify New Payment
Once approved, PMI removed from next month's payment.
✅ Success! Check your next mortgage statement to confirm PMI is gone. Save $200-$400/month!
📝 PMI Cancellation Letter Template
Copy and customize this template:
[Your Name]
[Your Address]
[City, State ZIP]
[Date]
[Lender Name]
[Lender Address]
[City, State ZIP]
RE: Request for PMI Cancellation
Loan Number: [Your Loan Number]
Property Address: [Property Address]
Dear [Lender Name],
I am writing to formally request the cancellation of Private Mortgage Insurance (PMI) on my mortgage loan referenced above.
According to my calculations, my current loan-to-value (LTV) ratio is [XX]%, which is below the 80% threshold required for PMI cancellation under the Homeowners Protection Act.
Current Details:
- Original Loan Amount: $[Amount]
- Current Loan Balance: $[Balance]
- Original Home Value: $[Value]
- Current Home Value: $[Value] (see attached appraisal)
- Current LTV: [XX]%
I have maintained a good payment history with no late payments in the past 12 months. [If applicable: I have attached a recent appraisal showing the current value of my home.]
Please review my request and confirm the cancellation of PMI on my account. I look forward to your response within 30 days as required by law.
Thank you for your attention to this matter.
Sincerely,
[Your Signature]
[Your Printed Name]
❌ When You CAN'T Cancel PMI/MIP
1. FHA Loan with Less Than 10% Down (Before 2024)
Problem: MIP for life of loan. Solution: Refinance to conventional once you have 20% equity.
2. LTV Still Above 80%
Problem: Not enough equity yet. Solution: Make extra payments or wait for appreciation.
3. Recent Late Payments
Problem: 30-day late in past 12 months. Solution: Wait until 12 months of on-time payments.
4. Lender-Paid MI (LPMI)
Problem: MI built into rate, can't cancel. Solution: Refinance to new loan without LPMI.
5. High-Risk Loan (Investment Property, etc.)
Problem: Lender requires MI regardless of LTV. Solution: Refinance with different lender.
❓ Mortgage Insurance Cancellation FAQ
How long does it take to cancel PMI?
Timeline: 30-60 days total. Once you submit your request with all required documents (appraisal, payment history, etc.), lenders typically take 30-45 days to review and approve. PMI is removed from your next monthly payment after approval. If using automatic cancellation at 78% LTV, it happens automatically with no action needed.
Do I need an appraisal to cancel PMI?
Depends on your situation:
- NO appraisal needed: If using original home value and you've paid down to 80% LTV through normal payments.
- YES appraisal needed: If claiming home appreciation to reach 80% LTV faster. Cost: $400-$600.
- Automatic cancellation at 78%: No appraisal needed, happens automatically.
Can I cancel FHA MIP without refinancing?
NEW 2024 RULE: Yes, in some cases!
- If you put down 10%+ originally: MIP cancels after 11 years automatically (NEW 2024 rule)
- If you put down less than 10%: MIP for life of loan—must refinance to remove
- Best option: Refinance to conventional once you have 20% equity (no PMI)
What if my lender refuses to cancel PMI?
Your rights under the Homeowners Protection Act:
- Request in writing: Send certified letter requesting cancellation with proof of 80% LTV
- Cite the law: Reference Homeowners Protection Act of 1998 (requires cancellation at 80% LTV)
- File complaint: Contact Consumer Financial Protection Bureau (CFPB) if lender refuses
- Refinance: Last resort—refinance with different lender to remove PMI
Is it worth paying for an appraisal to cancel PMI?
YES, if the math works out!
Break-even calculation:
Appraisal cost: $500
PMI savings: $200/month
Break-even: $500 ÷ $200 = 2.5 months
Verdict: If appraisal shows you qualify, you break even in 2.5 months and save $2,400/year after that. Totally worth it!
Can I cancel PMI if I refinanced?
Yes, same rules apply! If you refinanced and still have PMI, you can cancel it once you reach 80% LTV on the NEW loan. The clock resets with each refinance—you need to reach 80% LTV based on the new loan amount and home value at refinance. If you refinanced with 20%+ equity, you shouldn't have PMI at all!
Stop Wasting Money on Mortgage Insurance
Check if you can cancel PMI/MIP today and save $2,400-$4,800/year
🎯 Key Takeaways: Cancel Mortgage Insurance 2026
Request cancellation, don't wait!
10%+ down = cancels after 11 years
Get appraisal to prove 80% LTV
Reach 80% LTV in 3-5 years
Switch to conventional at 20% equity
Massive savings by canceling
Formal request letter required
Homeowners Protection Act protects you