What PMI is, and why it ends
PMI (Private Mortgage Insurance) is a monthly premium lenders require when your down payment is under 20% of the home's value. It protects the lender against default — it gives you no coverage at all. Typical cost runs 0.3%–1.5% of the loan per year, which on a $330,000 loan is roughly $80–$400 a month. Because it's pure cost with no benefit to you, cancelling it as early as possible is one of the cleanest wins in personal finance.
The two dates that matter
80% — you can request cancellation. Once your balance reaches 80% of the home's original value, you have the right to ask your servicer to cancel PMI in writing. This is a request, not automatic: if you never ask, you keep paying. Your loan must be current and the lender may require an appraisal.
78% — it must come off automatically. At 78% of the original value, the servicer is legally required to terminate PMI without you asking. Crucially, this date is based on your original amortization schedule, not your actual balance — so paying extra does not pull this date forward. That asymmetry is exactly why the request matters.
Why extra payments only help one of the dates
Extra principal payments lower your actual balance faster, so you hit the 80% request threshold sooner — sometimes by years. But the automatic 78% termination is pegged to the schedule you originally signed. If you're prepaying and never send the cancellation request, you can end up paying PMI long after you had the right to stop. Run the numbers above, then put a calendar reminder on the earlier date.
Other routes off PMI
If your home has appreciated, some servicers will cancel based on a current appraisal rather than the original value — this calculator doesn't assume that, because policies vary and appraisals cost a few hundred dollars. It's worth a phone call if prices in your area have risen sharply. Refinancing also ends PMI, but only makes sense if the new rate justifies the closing costs — our refinance break-even calculator covers that trade-off.
Loan types this doesn't cover
These rules apply to conventional loans. FHA loans carry MIP (Mortgage Insurance Premium) instead, which on most modern FHA loans lasts the life of the loan and can only be removed by refinancing into a conventional mortgage. VA loans have no monthly mortgage insurance at all.