How to Cancel Private Mortgage Insurance Fast (2025)

Private Mortgage Insurance (PMI) is the quiet line on your statement that protects the lender—not you—whenever your down payment was under 20%. The good news: PMI is rarely permanent. With a clear plan, you can cancel it and redirect that money to principal, savings, or renovations.

This guide shows you how to cancel PMI step by step. This way, you can stop paying sooner and avoid common problems that keep borrowers stuck for months.

We will begin with the basics. It includes what “equity” means, how to calculate loan-to-value (LTV), and which loans qualify. Then, we will go through four ways to remove PMI. You have a few options for removing PMI.

• You can request removal when your LTV reaches 80%.
• The process will end automatically when your LTV hits 78%.
• You can cancel early with a new appraisal.
• You can also refinance into a conventional loan without PMI.

You will receive checklists, a cancellation letter you can copy and paste, a phone script, and easy break-even math. This will help you decide if a small principal “top-off”, a recast, an appraisal, or a refinance is the best option for you.

Four easy ways exist to remove PMI from a conventional mortgage:

• Request cancellation at 80% LTV. When your loan balance hits 80% of the property's value, you can ask your servicer to remove PMI.
• Let it terminate automatically at 78% LTV. If you’re currently on payments, PMI must fall off based on your original amortization schedule.
• "Cancel early with a new amount." If your home’s value has climbed (market gains or renovations), an approved valuation can prove 20% equity sooner.
• Refinance your loan to remove PMI. If the overall math beats waiting—after costs—refi can eliminate PMI immediately.

This guide shows you each step clearly. It includes checklists, a copy-paste letter, a call script, and easy math tips. This way, you won't miss any savings.

What PMI is—and why it’s not forever

Private Mortgage Insurance is an insurance premium you pay on conventional loans when your down payment is under 20%. It protects the lender if you fail to pay. It does not protect you.

The good news is that PMI is usually temporary. Once you have enough equity and meet your servicer’s conditions, you can remove it. These conditions include a good payment history, occupancy, and no junior liens.

PMI can be structured in several ways:

• Borrower-paid monthly (most common): removable when you hit the equity target and qualify.
• Single- or split-premium: you’ve paid most or all it upfront, so there may be no monthly line to cancel.
• Lenders include the cost in a higher interest rate for lender-paid mortgage insurance (LPMI). Nothing to “cancel”—you typically remove the cost by refinancing to a new loan with no LPMI.

Rules for government-backed loans differ (more on FHA/USDA/VA below).

Before you act

Run through this short list so you don’t waste time:

• Owner-occupied: Most servicers require the home to be your primary residence to cancel.
• Payment history: No recent 30-day lates; many require 12 months of on-time payments.
• No junior liens: If you have a HELOC/second mortgage, you may need subordination or payoff to qualify.
• Adequate value means that the original value has not decreased. It also means that the current value allows for early removal through appraisal.

Some early-removal policies need a minimum time in the home. Usually, the duration is 2 to 5 years, unless improvements increase the value.

Collect these items as you go:

• Your latest mortgage statement
• Amortization schedule or loan history
• Proof of occupancy (like an ID or utility bill)
• Insurance declaration
• Tax record
• Any receipts or photos of improvements

Request removal at 80% LTV

Why it Works

You can request to cancel PMI. Possible when your principal balance reaches 80% of the original property value. This value is usually the purchase price or the original appraisal. Earlier than the 78% automatic cutoff, it can save months of premiums.

Step-by-step

1. Find your 80% date. Check your amortization schedule to see the month you’ll cross 80%—or accelerate it. If you are near the limit, show how a one-time principal payment can help. Use a PMI removal calculator to find the exact month and possible savings.
2. Call your servicer for the checklist. Ask what valuation you accept. That could be an automated model, a broker price opinion, or a full appraisal.
3. Also, inquire about the rules for seasoning. Learn what documents they need and where to send your written request.
4. Prepare your packet. Please include a cover note with your loan number. Also, add an owner-occupancy statement, recent statements, and insurance documents.
5. Include tax documents and a valuation if needed. If they use your original value and need to confirm “no decline”, they’ll tell you how they verify it.
6. Send a written request. Aim to submit a few weeks before your computed 80% date so the process completes right when you qualify.
7. Follow up weekly. Keep dated notes of calls and emails until you receive written confirmation of the cancellation date.

Copy-paste cancellation letter

Subject: Request for PMI Cancellation — Loan #[XXXX]

Dear [Servicer Name],

I am the loan recipient for Loan #[XXXX] at [Property Address]. My current principal balance is [$X].

That means my loan-to-value is 80% or lower.. The statement bases itself on [original value / attached valuation]. The property is my primary residence, and payments are current.

Per the Homeowners Protection Act and your guidelines, I’m requesting PMI cancellation effective at my eligibility date. Included: [occupancy proof, insurance, tax records, valuation if required].

Please confirm receipt and the effective cancellation date in writing.

Sincerely,

[Your Name] | [Phone] | [Email]

Pro tip: If you’re at, say, 80.3%, a small lump-sum principal payment can tip you below 80% and stop PMI right away.

Let PMI terminate automatically at 78%

If you prefer a simple option, PMI will automatically end. That happens when your balance reaches 78% of the original value. Your loan must be up to date for this to be true. The drawback is obvious—you’ll likely pay PMI for extra months that you could have avoided by requesting at 80%.

At the absolute least, ask your servicer for your PMI termination schedule. Mark the date on your calendar and check that it ends on time.

Cancel sooner with a new appraisal or AVM

If your home’s market value has gone up, or you’ve made real improvements, you can sometimes remove PMI earlier. Possible by using current value thresholds. Common guidelines (these vary by servicer and investor):

1. If you’ve owned the home for 2–5 years, you may need a ≤75% LTV based on a new valuation.
2. If you have owned it for more than 5 years, you may qualify for ≤80% LTV on the new value.
3. Documented improvements can sometimes allow exceptions inside those time windows.

Step-by-step

1. Ask what valuation is acceptable. Some servicers let you use an automated valuation model (AVM) or a broker price opinion (BPO). Others need a full appraisal that you must order through their approved channel.
2. Pre-qualify the value. Pull realistic comps; line up permits, receipts, and photos for upgrades (kitchen/bath, roof, windows, energy systems). Improvements that maintain condition may not count; those that add usable space or efficiency often do.
3. Order the valuation the right way. Use your servicer’s process—do not freelance your own appraiser unless they permit it, or they may reject it.
4. Submit your removal request with the valuation and standard documents. If the value comes in short, you can appeal with stronger comps or wait for new nearby sales to close and try again.

Refinance into a loan with no PMI

Refinancing can erase PMI immediately if your new loan amount is ≤ 80% of your approved value. It can lower your rate and payment. It can also change your term or unlock cash-out. Be careful with cash-out, as it can raise LTV and bring back PMI.

How to know if refi beats waiting

1. Compute savings vs. costs. Tally the new principal & interest payment, any rate change, and the total closing costs (points, origination, title, appraisal, prepaids).
2. Break-even months equal total costs divided by monthly savings. If you plan to stay longer than the break-even point, refinancing may be a better choice. This holds true even if your present rate isn't significantly higher.
3. Consider LPMI and FHA: If your current loan has lender-paid MI embedded in the rate, or you’re in an FHA loan with long-life MIP, refinancing to a no-PMI conventional loan might pay back quickly.

Run quick what-ifs with an auto refinance calculator to compare “keep the loan and cancel at 80%” versus “refi now with no PMI.”

Extra payment and recast strategy 

You don’t always need a full refinance to speed up PMI removal:

• Targeted extra principal: Send a lump sum with instructions to apply to principal only.
• Loan recast: After a lump sum payment, some servicers will recalculate your monthly payment. They charge a small fee for this service.

The system will base your new payment on the lower balance. The interest rate and maturity date will stay the same. Recast can help you cross 80% LTV and enjoy a lower monthly payment without refi costs.

To see how an extra payment affects your loan each month, use a Reverse Amortization Calculator. This tool shows how fast you can reach the PMI cutoff.

Government-backed loans: FHA, USDA, and VA

These loans don’t use “PMI” the same way, so the removal rules differ:

1. FHA: You pay Mortgage Insurance Premium (MIP). Depending on the case number, date and down payment, MIP can be for the life of the loan. Many borrowers remove it by refinancing into a conventional loan after they meet credit, income, and equity requirements.
2. USDA: There is a guarantee fee you pay upfront and an annual fee. These fees work differently from PMI. Check if a conventional refinance is better once you have enough equity.
3. VA: There is no monthly PMI. Most borrowers pay a one-time funding fee. Some service-connected disabilities and other exemptions waive this fee. If you’re planning a VA purchase or refi, estimate the total cost impact with a VA funding fee calculator.

Investment properties and second homes

Expect stricter removal standards for non-primary residences—often lower LTV targets, a full appraisal, and spotless payment history. If you are deciding between “pay down, appraise, or refi,” check the cash-flow effect of removing PMI. Use a rental property roi calculator to see how the monthly numbers change before and after.

Phone script you can read word-for-word

"Hi, I'm asking about removing PMI for Loan #[XXXX] at [Property Address]."

With the updated valuation, my LTV is about 80%, making me eligible.

What valuation methods do you accept? Do you utilize AVM, BPO, or a comprehensive appraisal? Who initiates the process? What rules apply for seasoning or payment history?

What documents do you need from me, and what’s the expected timeline once I submit?”

Use this call to get the right mailing or upload address for your request. You can also confirm any appraisal process you need.

Three real-world examples

Early cancellation via a small top-off

Balance $324,000 on a $400,000 original value = 81% LTV. The borrower pays $4,000 to the principal, pushing LTV to 80% and submits the request packet.

The next statement cycle concludes PMI. Save $165 monthly. Cash payback is in 24 months from PMI savings. Rates dropping and refinancing later will make it faster.

Appreciation-based removal

Purchase a house for $380,000 with a 5% initial payment. After two years and a mid-range kitchen upgrade, comps support $430,000.

Balance $356,000, new LTV ~82.8%. The borrower pays an $11,000 lump sum to reach 80% of the current value, and the lender removes PMI within 30 days. Save $190 monthly; recoup in 58 weeks.

Refi beats waiting

Current loan $420,000 at 6.25% with $210 PMI. A fresh refinancing offer at 5.5% includes expenses of $6,000 and an updated balance at 80% LTV. Payment drops by $235/mo, plus PMI vanishes. Break-even point is approximately 26 months; borrower plans to remain 7+ years → refinancing is advantageous.

Myths vs. facts

Myth: “PMI automatically falls off at 80%.”

Fact: 80% is the request threshold; 78% is the automatic termination point.

Myth: “You must refinance to get rid of PMI.”

Fact: Not if you can qualify for removal via 80% request or current-value appraisal rules.

Myth: “All valuations are the same.”

Fact: Your servicer decides whether an AVM/BPO is acceptable or whether you need a full appraisal.

Myth: “Extra payments don’t help much.”

Fact: A small, targeted principal payment can bring your LTV under 80% and stop PMI months sooner.

Conclusion

Eliminating PMI isn't a matter of chance—it's a process. Begin by ensuring you fulfill the essentials. You should be current on payments, own the home, and have no junior liens.

Next, select the fastest and simplest choice for your circumstances. If your LTV nears 80%, request the cancellation of PMI. This way, you can stop paying it months earlier than waiting for the 78% automatic termination.

If your home has increased in value or you’ve made upgrades, get a new appraisal. It can display the current value and assist in eliminating PMI earlier.

When the numbers add up, refinancing to a conventional loan can be very helpful. This is especially true with LPMI or FHA MIP. This option can help you avoid PMI and save money right away.

Treat this like a short project:

1. Pick your path (80% request, 78% automatic, appraisal-based, or refi).
2. Do the math (break-even, LTV, and payoff timing).
3. Assemble your packet (occupancy proof, statements, insurance/tax docs, valuation if required).
4. Send the letter and follow up until you have the cancellation date in writing.

Remember, small moves often make the biggest difference. A targeted principal payment can push you under 80% LTV. A well-timed appraisal can shave months of PMI. A properly structured recast or refinance can reset your payment and remove the premium entirely.

Use the calculators referenced above to model LTV, payment timelines, refinance scenarios, and long-term costs in minutes. With a clear plan and the right numbers, PMI can change from a monthly burden into real savings. That frees up cash for your next goal. You can use it to pay down principal, fund renovations, or build your emergency reserve.