How it works
Private mortgage insurance is the premium a borrower pays to protect the lender — not themselves — when a conventional loan starts above 80% loan-to-value, typically $40 to $250 per month per $100,000 borrowed. It is also one of the few insurance products you can legally fire early, which makes knowing your removal date pure money. Federal law fixes three doors: you may request cancellation once the balance reaches 80% of the ORIGINAL price; servicers must terminate automatically at 78%; and if the home's VALUE has risen enough that your balance sits under 80% of today's worth, most lenders will remove PMI after a reappraisal costing $150–$500. This calculator walks your amortization month by month under all three routes, flags whichever arrives first, totals the premiums still payable until then, and shows the annual savings waiting on the other side. On the defaults — a $378,000 loan at 6.5% with the home now worth $450,000 — appreciation alone pulls the reappraisal door open years before scheduled amortization would, sparing roughly $185 every month indefinitely. Extra principal accelerates every route at once. FHA borrowers face different rules: most post-2013 FHA mortgages carry mortgage-insurance premiums for life regardless of equity, so escape usually means refinancing to conventional.
Formula
Cancel at balance ≤ 80% × original price | Auto-end at ≤ 78% | Reappraisal route at ≤ 80% × today's value
Tips
- Request removal in writing the moment you cross any threshold — nobody does it for you early.
- A $300 reappraisal beats years of $185 premiums whenever values have risen.
- Direct the freed PMI dollars to principal to compound the win monthly.
- FHA MIP mostly lasts the life of the loan — plan a conventional refi instead.
- Re-run this after each annual appraisal notice; values move the date more than payments do.
Frequently asked questions
- When can I remove PMI from my mortgage?
- Three thresholds: request it at 20% equity against the original price, automatic termination at 22%, or earlier still if 80% of today's appraised value exceeds your balance. With a $378,000 loan and a home now worth $450,000, the reappraisal route can end roughly $185 monthly premiums years ahead of schedule.
- Does PMI automatically fall off at 78% LTV?
- Yes — on conventional loans closed after mid-1999, servicers must auto-terminate PMI at 78% of the original value if you are current on payments. But automatic means 'eventually': requesting cancellation at 80%, or proving today's-value equity via reappraisal, typically beats the auto date by years.
- How much money does dropping PMI save?
- Between 0.2% and 1.5% of the loan per year depending on credit and down payment. The default profile here pays $185 monthly — $2,220 annually — which redirected to principal retires a 30-year mortgage several years early while the equity keeps compounding silently underneath.
- Can I get rid of PMI without 20% equity?
- Only through value, not payments: if comparable sales push your home's worth high enough that the balance falls below 80% of the NEW value, lenders accept a reappraisal ($150–$500). A $378,000 balance needs just $472,500 of value at exactly 80% — achievable in appreciating markets well before amortization gets there.
- Is FHA mortgage insurance removable like PMI?
- Rarely. Most FHA loans endorsed after June 2013 carry mortgage-insurance premiums for the life of the loan unless you put 10%+ down, where it ends after 11 years. The practical exit is refinancing into a conventional loan once equity and credit allow — trading MIP for either no insurance or cancellable PMI.