How to Get Rid of PMI

If you bought with less than 20% down on a conventional loan, you’re paying private mortgage insurance (PMI) — a monthly charge that protects the lender, not you. Useful tool: it got you into the house years before a 20% down payment would have. But it’s meant to be temporary, and here’s the part worth money: you don’t have to wait for it to fall off on its own. There are three exits, and the fastest one is the one nobody tells you about.

Exit 1: Automatic termination (the slow lane)

Under the federal Homeowners Protection Act, your servicer must automatically cancel PMI when your balance amortizes down to 78% of the home’s original value (the purchase price / original appraised value when you bought), assuming you’re current. There’s also a backstop at the loan’s midpoint regardless of balance.

This is the default path — and the slowest, because it ignores two things: extra payments you might make, and every dollar of appreciation since you bought.

Exit 2: Request cancellation at 80% (the deliberate lane)

You don’t have to wait for 78%. At 80% of original value, you can request cancellation in writing. Requirements are straightforward:

• Current on payments, with a good recent payment history
• No other liens on the property
• The servicer may want evidence the value hasn’t fallen

The lever here: extra principal payments pull that 80% date forward. If you’re within range, a targeted lump sum that crosses the line can kill PMI immediately — often one of the best guaranteed returns available to a homeowner.

Exit 3: Removal through appreciation (the fast lane nobody mentions)

Here’s the one that surprises people: PMI removal can be based on your home’s current value, not just the original one. If your home has appreciated — and along the Front Range, many have — your actual equity may already be past the threshold even though your loan balance says otherwise.

The mechanics: you ask your servicer about a value-based cancellation, they order an appraisal (or another accepted valuation, at your cost — typically a few hundred dollars), and if the numbers clear their equity requirements, PMI ends. Investor rules commonly require more equity on this path than the 80%-of-original route — frequently 75% LTV if you’ve had the loan only a couple of years, 80% after longer — and each servicer has its own process. But the math is often ridiculous in your favor: a one-time appraisal fee to delete a monthly charge forever.

Not sure whether your value clears the bar? That’s a two-minute check for us — we watch local comps all day. Ask before you spend on the appraisal.

The FHA exception (different playbook entirely)

Everything above is about conventional PMI. FHA loans carry their own MIP, with harsher rules: for most FHA loans with minimal down payment, MIP lasts the life of the loan — no 78% trigger, no request path. The standard exit is refinancing into a conventional loan once your equity and credit support it. Whether that trade wins depends on the rate you’d give up — exactly the refinance break-even math we’ve written about. If you’re on FHA and your home has appreciated, it’s worth running honestly.

What’s it worth?

PMI commonly runs roughly 0.3%–1.5% of the loan amount per year depending on your credit and down payment — call it $75–$350+/month on typical Colorado Springs balances. Deleting it is a permanent raise with zero lifestyle change. If your score has improved since you bought, note that PMI pricing is credit-sensitive — one more variable a refi-or-remove review should weigh. (Your score’s effect on mortgage pricing.)

This guide is part of our Homeowner Library — the owner’s manual for everything that happens after closing.

Frequently asked questions

When does PMI automatically go away? At 78% of the home’s original value (or the loan’s midpoint), if you’re current. You can act sooner.

Can I remove PMI because my home went up in value? Often yes — servicers allow current-value cancellations with a new appraisal, typically requiring around 75–80% LTV depending on loan age. Ask your servicer for their exact process.

Does FHA mortgage insurance cancel like PMI? Generally no — most FHA MIP runs for the life of the loan. The usual exit is refinancing to conventional once equity allows.

Is paying for the appraisal worth it? If the value clears the threshold, you trade a one-time fee of a few hundred dollars for deleting a monthly charge permanently. Verify the numbers first — we’ll gut-check comps for free.

By Timothy Chase, Founder, 719 Lending — Colorado Springs mortgage broker. NMLS #868175 (Company NMLS #1601989). Equal Housing Opportunity. This article is educational only and is not financial, tax, or legal advice; program details and figures are general — confirm current. 719 Lending is not affiliated with or endorsed by any government agency. Servicer and investor requirements vary — confirm your loan’s specifics. Last updated: July 2026.