If you bought a home with less than 20% down, you're paying private mortgage insurance every single month. On a typical $300,000 loan, that's $125 to $375 per month — money that builds zero equity and provides zero benefit to you. PMI protects your lender, not you. Here are five ways to get rid of it.
PMI typically runs 0.5% to 1.5% of your original loan amount per year, broken into monthly payments. The exact rate depends on your credit score, down payment percentage, and loan amount. On a $300,000 loan with 10% down and a 720 credit score, expect to pay around $150 to $200 per month.
Over time, this adds up dramatically. At $200/month, you'll pay $2,400 per year. If it takes 8 years to reach 20% equity through normal amortization, that's $19,200 in PMI payments — nearly as much as a 5% down payment itself. Every month you can shave off that timeline saves you real money.
Under the Homeowners Protection Act (HPA), your lender must automatically cancel PMI when your loan balance reaches 78% of the original purchase price — based on your amortization schedule, not current home value. This is the do-nothing approach. You don't need to call, write, or request anything.
The catch: this is based on the original value, not current value. If your $300,000 home has appreciated to $360,000, it doesn't matter for automatic cancellation — the lender uses the $300,000 purchase price. On a $270,000 loan (10% down on $300,000) at 6.5%, automatic removal happens around year 9. That's a long time to wait.
Also, automatic cancellation only kicks in if you're current on payments. If you've missed any payments, the lender can delay cancellation until you're caught up. Keep your payment history clean to ensure this happens on schedule.
You don't have to wait until 78%. Once your loan balance hits 80% of the original purchase price, you can proactively request cancellation. This triggers two years earlier than automatic removal and can save you $3,000 to $5,000 in PMI payments.
To request removal, write a formal letter to your lender (some accept online requests) stating that your loan balance has reached 80% LTV and you're requesting PMI cancellation. You'll need to be current on payments with no late payments in the past 12 months. The lender may require an appraisal to confirm the home hasn't lost value — expect to pay $400 to $600 for this.
Mark your calendar for the date your amortization schedule shows you'll hit 80% LTV. Set a reminder for one month before so you can initiate the process. Your lender won't remind you — they're happy to keep collecting PMI as long as possible.
This is the method most borrowers don't know about. If your home has appreciated significantly, you may already be at 80% LTV based on current value — even if your amortization schedule says otherwise. A new appraisal reflecting the higher value can trigger PMI removal years ahead of schedule.
Here's a real example. You bought a $300,000 home with 10% down ($270,000 loan). After 3 years, your loan balance is around $260,000. Based on the original value, your LTV is 87% — still above 80%. But if your home is now worth $340,000, your actual LTV is 76%. You qualify for PMI removal.
The rules vary by lender and investor (Fannie Mae vs Freddie Mac). Generally, if you've had the loan for 2 to 5 years and your LTV based on current value is below 80%, you can request removal with a new appraisal. If you've had the loan less than 2 years, you typically need to be below 75% LTV. Call your lender and ask about their specific reappraisal policy.
The appraisal costs $400 to $600, but if it eliminates $200/month in PMI, you recoup the cost in 2 to 3 months. Check comparable sales in your neighborhood first — if homes similar to yours have sold for 10% to 15% more than your purchase price, it's worth ordering the appraisal.
Refinancing replaces your current mortgage with a new one. If your home has appreciated enough that you have 20% equity at the new appraised value, the new loan won't require PMI at all. This method works best when interest rates have dropped or your home value has increased significantly.
The math needs to work on two levels. First, the PMI savings need to justify the refinance closing costs ($4,000 to $8,000 typically). At $200/month PMI savings, it takes 20 to 40 months to break even on closing costs alone. Second, the new interest rate should be comparable to or better than your current rate. Refinancing into a higher rate just to drop PMI usually doesn't make sense.
One scenario where refinancing clearly wins: you bought with an FHA loan and you're stuck with lifetime MIP. Refinancing into a conventional loan at 80% LTV eliminates mortgage insurance permanently. If your credit has improved since purchase and your home has appreciated, this can save you tens of thousands over the remaining loan term.
The most direct method: pay down your loan faster to reach 80% LTV sooner. Every extra dollar you pay goes straight to principal, accelerating your timeline to PMI removal.
On a $270,000 loan at 6.5%, your scheduled monthly payment is about $1,706. Adding just $200/month in extra principal payments reduces the time to reach 80% LTV from roughly 9 years to about 6 years. That's 3 years of PMI savings — approximately $7,200 at $200/month PMI. The extra payments also save you about $45,000 in interest over the life of the loan.
You can also make lump-sum payments. Received a bonus, tax refund, or inheritance? Throwing $5,000 or $10,000 at the principal moves the PMI removal date forward significantly. After any large extra payment, check your LTV and request removal as soon as you cross the 80% threshold.
Let's put it all together. On a $300,000 loan with $200/month PMI, here's what each method saves compared to waiting for automatic removal at 78% LTV (roughly year 9). Requesting at 80% LTV saves about $4,800 (2 years of PMI). Reappraisal after value increase (if home appreciated 15% in 3 years) saves about $14,400 (6 years of PMI). Extra payments of $200/month save about $7,200 (3 years of PMI). Each approach can be combined — making extra payments while monitoring your home's value for a reappraisal opportunity maximizes your savings.
Don't let PMI quietly drain your budget for years longer than necessary. Check your current LTV, research your home's current value on Zillow or Redfin (then adjust down 5% for a conservative estimate), and take action. Use our PMI calculator at /tools/pmi-calculator to see your specific numbers, and our extra payment calculator at /tools/extra-payment-calculator to model how additional principal payments change your timeline.