By Meraj Uddin Provat · Last reviewed August 24, 2026 · Editorial Standards
Private mortgage insurance protects your lender, not you — and on a $400,000 home with 10% down at $150/month, waiting for it to fall off on its own costs $16,350. There are three separate ways out, and the one almost nobody uses is by far the fastest.
The three paths off PMI
Using a $400,000 purchase, 10% down ($40,000), $360,000 loan at 6.5%, PMI at $150/month:
| Path | When it happens | Total PMI paid | Saved vs waiting |
|---|---|---|---|
| Automatic termination at 78% LTV | 9 years, 1 month | $16,350 | — |
| Request removal at 80% LTV | 7 years, 11 months | $14,250 | $2,100 |
| Request based on appreciation (3%/yr) | 2 years, 10 months | $5,100 | $11,250 |
The appreciation route is the outlier. Because it measures the loan against the home’s current value rather than its original purchase price, modest 3% annual appreciation gets you to 80% roughly six years sooner than amortization alone.
How each one actually works
1. Automatic termination (78% LTV)
Under the federal Homeowners Protection Act, your servicer must automatically cancel PMI on most conventional loans once the balance reaches 78% of the original purchase price, provided you are current on payments. You do nothing — but you also wait the longest.
2. Borrower-requested cancellation (80% LTV)
You may request cancellation in writing once the balance hits 80% of the original value. The servicer can require that you have a good payment history and may ask for evidence the value has not declined. This is free money — it just requires you to actually ask, on schedule.
3. Cancellation based on current value (the shortcut)
If your home has appreciated, you can request cancellation based on its current appraised value rather than the purchase price. This typically requires paying for an appraisal (commonly $400–$600) and meeting your servicer’s seasoning requirements — often 2 years of ownership at 75% LTV, or 5 years at 80%. On the example above, spending ~$500 on an appraisal to stop $150/month years early pays for itself in under four months.
Important exception: FHA loans
FHA mortgage insurance (MIP) does not follow these rules. On most FHA loans originated after June 2013 with less than 10% down, MIP lasts for the entire life of the loan regardless of equity. The standard exit is refinancing into a conventional loan once you have 20% equity — which is a different calculation entirely.
Run your own numbers
Your price, down payment, rate, PMI amount, and local appreciation all shift these dates. The free PMI Removal Calculator shows exactly when you hit 80% and 78% LTV, plus the appreciation-adjusted date and total PMI paid — no signup required. Considering an FHA-to-conventional refinance to escape MIP? The FHA vs Conventional Calculator compares the full cost both ways.
FAQ
At what point does PMI go away?
On conventional loans, PMI terminates automatically once the balance reaches 78% of the original purchase price, and you may request cancellation at 80%. On a $400,000 home with 10% down at 6.5%, that is about 9 years 1 month and 7 years 11 months respectively.
Does PMI fall off automatically?
Yes, on most conventional loans. The Homeowners Protection Act requires servicers to automatically terminate PMI at 78% loan-to-value based on the original purchase price, as long as you are current on payments. FHA loans generally do not work this way.
Can I remove PMI if my home value increased?
Often yes. Many servicers allow cancellation based on the current appraised value rather than the original purchase price, typically requiring a new appraisal and meeting seasoning requirements such as 2 years at 75% LTV or 5 years at 80% LTV. With 3% annual appreciation this can remove PMI years earlier.
How much equity do I need to get rid of PMI?
20% equity to request cancellation, or 22% for automatic termination, measured against the original purchase price. If you are using current appraised value instead, servicer requirements commonly range from 20% to 25% equity depending on how long you have owned the home.