How to Remove PMI From Your Mortgage

Quick answer

You can remove PMI from a conventional loan in four ways: request cancellation once you reach about 20% equity, let it drop automatically at 22% equity based on your original schedule, get a new appraisal if your home has gained value, or refinance out of it. FHA mortgage insurance (MIP) works differently — on most FHA loans the only way to shed it is to refinance into a conventional loan.

PMI Is Not the Same as FHA's MIP

First, make sure you know which one you have, because the rules are completely different. PMI (private mortgage insurance) rides on conventional loans and is designed to fall off once you have enough equity. MIP (FHA's mortgage insurance premium) rides on FHA loans and, on most of them today, stays for the life of the loan. If you have PMI, the four options below apply. If you have MIP, skip to the refinance section.

The Four Ways to Remove Conventional PMI

On a conventional loan you have real options, and it's worth knowing all four so you can pick the fastest one for your situation:

1. Request cancellation at 20% equity. Once your balance reaches 80% of the original value, you can ask your servicer in writing to cancel PMI.
2. Automatic termination at 22% equity. By law, the servicer must drop PMI on its own once your balance hits 78% of the original value, as long as you're current.
3. Prove new value with an appraisal. If your home has appreciated, a new appraisal showing 20–25% equity can qualify you to cancel early — even if you haven't paid the balance down that far.
4. Refinance out of it. Refinancing into a new loan with 20%+ equity removes PMI entirely, and can lower your rate at the same time.

Cancellation usually requires a solid payment history and no second mortgage on the home.

How Rising Home Value Speeds It Up

You don't have to pay your balance all the way down to 80% to drop PMI — if your home is worth more than you paid, that appreciation counts as equity. In a market where values have climbed, plenty of homeowners hit 20% equity years earlier than their payment schedule suggests. A fresh appraisal is what proves it. If you bought a few years ago and your neighborhood has gone up, this is often the fastest route.

When Refinancing Is the Only Way Out

This is the key one for FHA borrowers. On most FHA loans, the MIP doesn't cancel no matter how much equity you build — the only exit is to refinance into a conventional loan once you have 20% equity. That single move can drop the insurance and lower your rate together. It only makes sense if the numbers work, so we run the break-even first. For conventional homeowners, refinancing is also an option, but it's usually the last resort after the free cancellation routes above.

Common questions

How much equity do I need to remove PMI?

Generally 20% equity (an 80% loan-to-value) to request cancellation, and 22% for automatic termination. If your home has appreciated, a new appraisal can prove you're there sooner than your payments alone would.

Can I remove PMI without refinancing?

On a conventional loan, yes — through request cancellation, automatic termination, or a new appraisal showing enough equity. No new loan needed. Refinancing is only necessary when those routes aren't available.

Why won't my FHA mortgage insurance come off?

Most FHA loans written today carry MIP for the life of the loan, by design. Building equity doesn't cancel it. The standard way to shed FHA MIP is to refinance into a conventional loan once you have about 20% equity.

Does an appraisal to remove PMI cost money?

Yes, you'd pay for the appraisal — typically a few hundred dollars. If it confirms enough equity and ends your PMI, it usually pays for itself within a few months of saved premiums.

How do I start the process?

For conventional PMI, send your servicer a written cancellation request once you're at 20% equity. Not sure which route is fastest for you? Send me your loan details and I'll tell you the quickest way off — no cost to ask.