PMI Removal 2026: How to Cancel Private Mortgage Insurance & Save $200/Month
💰 SAVE $200+/MONTH: Remove PMI When You Hit 80% LTV!
Paying PMI? You can cancel it at 80% loan-to-value (20% equity). Automatic removal at 78% LTV. Average savings: $200-$250/month = $2,400-$3,000/year! 5 ways to remove PMI fast.
PMI removal 2026: What is PMI: Private Mortgage Insurance required when you put down <20%. Protects lender if you default. Cost: 0.5-1.5% of loan annually = $83-$250/month on $200K loan. When you can remove: Request removal at 80% LTV (20% equity), automatic at 78% LTV. 5 ways to remove: (1) Reach 80% equity naturally, (2) Refinance to 80%+ equity, (3) Get home reappraised, (4) Make extra principal payments, (5) Wait for automatic removal. Requirements: Good payment history (no 30-day late in 12 months), current on payments. Refinance to remove PMI. Related: conventional loan guide.
📊 PMI Savings Calculator
$200K Loan
$167/mo
$2,000/year PMI
$300K Loan
$250/mo
$3,000/year PMI
$400K Loan
$333/mo
$4,000/year PMI
5 Ways to Remove PMI Fast
Reach 80% LTV Naturally (Request Removal)
How it works: As you pay down your mortgage and/or your home appreciates, you reach 80% LTV (20% equity). You can then request PMI removal.
📊 Example Calculation
Original Home Value: $300,000
Original Loan: $285,000 (95% LTV, 5% down)
Current Loan Balance: $240,000 (after 5 years payments)
Current LTV: $240K ÷ $300K = 80% ✅
✅ You can request PMI removal!
✅ PROS
- • No cost (just request)
- • No refinance needed
- • Keep current rate
- • Simple process
❌ CONS
- • Takes time (5-10 years)
- • Based on original value
- • Must request (not automatic)
- • Need good payment history
Refinance to 80%+ Equity (Remove PMI)
How it works: Refinance your mortgage when you have 20%+ equity. New loan has no PMI. Works if home appreciated or you paid down principal.
📊 Refinance Example
Current Home Value: $350,000 (appreciated from $300K)
Current Loan Balance: $270,000
Current LTV: $270K ÷ $350K = 77% ✅
Refinance: New $270K loan at 77% LTV = NO PMI!
✅ Save $225/month PMI = $2,700/year!
✅ PROS
- • Remove PMI immediately
- • May get lower rate
- • Based on current value
- • Can cash out equity
❌ CONS
- • Closing costs ($3K-$6K)
- • Must qualify (credit, income)
- • Rates may be higher
- • Resets loan term
Get Home Reappraised (If Value Increased)
How it works: If your home appreciated significantly, order a new appraisal. If new value shows 80%+ equity, request PMI removal based on new appraisal.
📊 Reappraisal Example
Original Value (2023): $300,000
Current Loan Balance: $270,000
Original LTV: $270K ÷ $300K = 90% ❌
New Appraisal (2026): $360,000 (20% appreciation)
New LTV: $270K ÷ $360K = 75% ✅
✅ Request PMI removal with new appraisal!
✅ PROS
- • Low cost ($400-$600 appraisal)
- • No refinance needed
- • Keep current rate
- • Fast (2-4 weeks)
❌ CONS
- • Only works if home appreciated
- • Lender may not accept
- • Appraisal cost not refundable
- • May need 75% LTV (not 80%)
Make Extra Principal Payments (Accelerate to 80%)
How it works: Make extra payments toward principal to reach 80% LTV faster. Every extra dollar reduces your loan balance and gets you closer to PMI removal.
📊 Extra Payment Example
Current Loan Balance: $270,000
Home Value: $300,000
Current LTV: 90% (need to reach 80%)
Target Balance: $240,000 (80% of $300K)
Extra Payment Needed: $30,000
Strategy: Pay $500/month extra = reach 80% in 5 years
✅ Save $225/month PMI starting year 5!
✅ PROS
- • No cost (just extra payments)
- • Build equity faster
- • Save interest long-term
- • Flexible (pay when you can)
❌ CONS
- • Requires extra cash
- • Still takes time
- • May have better uses for money
- • Based on original value
Wait for Automatic Removal at 78% LTV
How it works: By law (Homeowners Protection Act), lender MUST automatically cancel PMI when you reach 78% LTV based on original value and amortization schedule.
📊 Automatic Removal Timeline
Loan Amount: $285,000 (95% LTV on $300K home)
78% LTV Target: $234,000
Monthly Payment: $1,900 (principal + interest)
Automatic Removal: After ~11 years of payments
⚠️ Don't wait! Request removal at 80% LTV (year 9)
✅ PROS
- • Guaranteed by law
- • No action required
- • No cost
- • Automatic process
❌ CONS
- • Takes longest (10-12 years)
- • Pay PMI 2 extra years vs 80%
- • Waste $5K-$6K in PMI
- • Based on original value only
🎯 Remove PMI & Save $200+/Month!
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PMI Removal Requirements
✅ What You Need to Remove PMI
1. Reach 80% LTV (20% Equity)
Calculation: Loan Balance ÷ Home Value = LTV. Example: $240K loan ÷ $300K value = 80% LTV ✅. Based on: Original purchase price (unless you get reappraisal).
2. Good Payment History
Required: No 30-day late payments in last 12 months, no 60-day late in last 24 months. Current: Must be current on all payments. Why: Lender needs to verify you're low-risk borrower.
3. No Other Liens on Property
Check for: Second mortgages, HELOCs, tax liens, judgment liens. Why: Other liens reduce your equity position. Solution: Pay off or subordinate other liens.
4. Written Request to Lender
How: Call lender, request PMI removal form. Include: Loan number, current balance, reason for request (reached 80% LTV). Timeline: Lender has 30 days to respond.
⚠️ When You CAN'T Remove PMI
- • FHA loans: MIP required for life of loan (if <10% down) or 11 years (if 10%+ down). Must refinance to conventional to remove.
- • Lender-paid PMI: PMI built into interest rate. Can't remove without refinancing.
- • Recent late payments: 30-day late in last 12 months = must wait.
- • Below 80% LTV: Must reach 80% LTV first (or 78% for automatic).
- • High-risk loan: Some loans require PMI for minimum period (2-5 years).
Frequently Asked Questions
How do I remove PMI from my mortgage?
5 ways to remove PMI: (1) Request removal at 80% LTV: Contact lender when you reach 20% equity. (2) Refinance: New loan with 20%+ equity = no PMI. (3) Get reappraisal: If home appreciated, new appraisal may show 80%+ equity. (4) Make extra payments: Pay down principal faster to reach 80% LTV. (5) Wait for automatic removal: Lender must cancel at 78% LTV (but you pay PMI 2 extra years). Best option: Request removal at 80% LTV (saves $5K-$6K vs waiting for 78%). Requirements: Good payment history, no other liens, written request. Refinance to remove PMI now.
How much does PMI cost per month?
PMI cost: 0.5-1.5% of loan amount annually. Monthly cost examples: $200K loan = $83-$250/month. $300K loan = $125-$375/month. $400K loan = $167-$500/month. Factors affecting cost: Credit score (lower = higher PMI), down payment (less = higher PMI), loan type (conventional, FHA). Average: Most borrowers pay 0.5-1.0% = $100-$200/month on $250K loan. Lifetime cost: If you pay PMI for 10 years on $300K loan = $30,000-$45,000 total! How to reduce: (1) Improve credit before buying, (2) Put down 10-15% (lower PMI), (3) Remove ASAP at 80% LTV.
Can I remove PMI without refinancing?
Yes! 3 ways to remove PMI without refinancing: (1) Request removal at 80% LTV: Contact lender when you reach 20% equity through payments + appreciation. No refinance needed. (2) Get home reappraised: If home appreciated significantly, order new appraisal ($400-$600). If shows 80%+ equity, request removal. (3) Wait for automatic removal at 78% LTV: Lender must cancel by law (but you pay PMI 2 extra years = waste $5K-$6K). Requirements: Good payment history (no 30-day late in 12 months), current on payments, written request to lender. When refinancing IS better: If you can also lower your rate (6.5% → 6.0%) = save on PMI + interest.
🚀 Stop Paying PMI! Save $200+/Month!
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Compare Rates Free →Free quotes • No obligation • Remove PMI today