PMI Removal Calculator

What Is PMI and When Does It Drop Off?

Private mortgage insurance (PMI) is required on conventional mortgages when your down payment is less than 20%. It protects the lender, not you, against default. Under the Homeowners Protection Act of 1998, PMI must automatically terminate when your loan balance reaches 78% of the original home value (scheduled, on the normal amortization path). You can also request cancellation once you reach 80% LTV — either through scheduled payments, extra principal, or documented home appreciation.

80% Borrower Request vs 78% Automatic

The 80% threshold is a request-based right. You must submit a written request, be current on payments, have no second liens, and sometimes pay for a new appraisal. The 78% threshold is automatic — the servicer must cancel PMI at the scheduled 78% point without any action from you. Midpoint cancellation is also mandated at the halfway point of the loan term (year 15 of a 30-year), even if LTV has not dropped to 78%.

How Extra Payments Accelerate PMI Removal

Adding just $100 a month in extra principal on a $400,000 loan can shave 2-3 years off the time to 80% LTV. The PMI premium itself (typically 0.5%-1.5% of the loan annually) makes every extra dollar of principal doubly valuable: you save interest on the main loan plus you retire the PMI cost sooner. This calculator projects removal dates both with and without your extra payments so you can quantify the payoff.

Can Home Appreciation Remove PMI Faster?

Yes — if your home has risen in value, you can request PMI cancellation when the current LTV (based on current appraised value, not purchase price) reaches 80%, assuming you have owned the home at least 2 years and 5 years for Freddie Mac loans. You will typically need to pay $400-600 for an appraisal. If the property has appreciated significantly, this can drop PMI years ahead of the amortization-based schedule.