Savings Guide
How to Remove Private Mortgage Insurance (PMI)
PMI can add hundreds of dollars to your monthly mortgage payment. Here's how to get rid of it as fast as possible.
What is PMI?
Private Mortgage Insurance (PMI) is a type of insurance that mortgage lenders require from homebuyers who take out a conventional loan but have a down payment of less than 20% of the home's purchase price.
Note: PMI protects the lender, not you, in case you default on your loan.
3 Ways to Cancel PMI
- Automatic Cancellation: Lenders are legally required to cancel PMI when your principal balance reaches 78% of the original home value.
- Requested Cancellation: You can request cancellation when you reach 80% LTV (Loan-to-Value).
- New Appraisal: If your home's value has increased significantly, a new appraisal might show you have more than 20% equity.
The Impact on Your Payment
Use our Mortgage Accelerator to see how much your monthly payment drops once PMI is removed. For many homeowners, this is a saving of $150–$300 per month.