Private Mortgage Insurance Removal Calculator

Calculate when private mortgage insurance (PMI) can be cancelled. Federal Homeowners Protection Act of 1998 (HPA) gives you two paths: (1) Automatic termination at 78% LTV based on original amortization schedule. (2) Borrower-requested cancellation at 80% LTV via paydown or appreciation. Cancellation saves $1,000-$3,500+/year for the typical mid-tier mortgage.

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PMI vs MIP — Different Rules

PMI (conventional Fannie/Freddie loans): cancellable. Annual cost 0.46-1.50% of loan balance. Subject to Homeowners Protection Act (HPA 1998). MIP (FHA loans): NOT cancellable for loans with <10% down (lifetime MIP). 11+% down: MIP cancels after 11 years. Only way out of FHA MIP is refinance to conventional. VA funding fee: one-time, not cancellable but not recurring. USDA annual fee: 0.35%, runs life of loan. This calculator covers conventional PMI.

Two HPA Paths

Automatic termination (HPA §4902): PMI MUST be removed when original amortization reaches 78% LTV — based on the original loan schedule, regardless of actual payment progress. Borrower need not request. Borrower request (HPA §4901): at 80% LTV, you may request cancellation. Servicer must consider. Requires: current on payments, good payment history, no other liens (2nd mortgage), property at original or higher value (or BPO/appraisal at servicer's discretion).

Cancelling via Appreciation

If your home appreciated to where current value puts you below 80% LTV (regardless of paydown), you can request cancellation. Servicer typically requires a new appraisal ($400-$600, borrower pays) and proof of payment history. Some servicers require holding the loan for 24+ months even if LTV target met. Fannie Mae allows appreciation-based cancellation after 24 months at 75% original-or-current value or 5 years at 80%. Worth doing when home prices have risen 15-25%+.

PMI Cost Math

Average PMI cost: 0.46% (great credit, 15% down) to 1.50% (lower credit, 5% down) of original loan balance per year. On a $350K loan at 0.75%, annual PMI = $2,625; monthly $219. Over 7 years until 80% LTV (typical timeline with 10% down, 30-yr 6.5%), total PMI paid = ~$18,000. Removing PMI early via paydown or appraisal cancellation can save thousands. Every $1,000 you spend on appraisal recovers in 5-6 months of cancelled PMI.

Sources: Homeowners Protection Act of 1998 (12 U.S.C. §4901), Fannie Mae Servicing Guide, Freddie Mac Single-Family Seller/Servicer Guide. Last updated: May 2026.