How to Get Rid of Private Mortgage Insurance (PMI)

Private mortgage insurance, or PMI, is a common cost for homeowners who buy a home with less than 20% down. Lenders require it because it protects them if a borrower defaults. But, since it doesn’t provide direct benefits to the homeowner, it makes sense to try to remove it as quickly as possible.

The good news is that PMI isn’t permanent. Depending on your loan type, equity level, and repayment progress, there are several ways to eliminate it. We’ll walk through practical, proven strategies that can help you reduce your mortgage costs and reach PMI-free status sooner.

Table of Contents

1. 5 strategies to get rid of PMI
   1. 1. Build 20% equity and request PMI removal
   2. 2. Receive an automatic PMI cancellation at 78% LTV
   3. 3. Reach the halfway point of your loan
   4. 4. Refinance to eliminate PMI
   5. 5. Repay your mortgage faster
2. How long FHA mortgage insurance premiums (MIP) last
3. Common mistakes to avoid
4. Choosing the best PMI removal method

5 strategies to get rid of PMI

Homeowners have more control over PMI than many realize, and there are several ways to remove it once certain milestones are met. The details matter because PMI rules are tied to equity, loan terms, and how the mortgage was structured at closing. 

Although PMI helps lenders approve conventional mortgage loans to borrowers with smaller down payments, it doesn’t benefit the borrower and becomes an unnecessary cost once borrowers are in a stronger equity position. 

With that context in mind, here are five practical strategies that can help you eliminate PMI and reduce your monthly housing expense.

1. Build 20% equity and request PMI removal

PMI can be removed once you reach 20% equity in your home. This usually happens as you pay down the principal, your home value increases, or a combination of both. 

Lenders determine eligibility using your loan-to-value (LTV) ratio, which compares your loan balance to your home’s value. An LTV of 80% means you now own 20% of the property.

To request removal, lenders may require documentation such as a recent appraisal to confirm the current value. Once verified, PMI can be dropped, lowering your monthly payment.

2. Receive an automatic PMI cancellation at 78% LTV

Lenders are required to automatically cancel PMI once your loan reaches 78% of the home’s original value, as long as your payments are current. This threshold is calculated based on your initial purchase price or appraised value at closing—whichever the lender used when issuing the loan. 

Because this rule is tied to the original value of your home, rising home prices don’t accelerate the timeline. No action is required on your part, but this approach can take longer than asking for removal at 80% LTV.

Still, it guarantees PMI will eventually drop off even if you don’t initiate the process yourself.

3. Reach the halfway point of your loan

Private mortgage insurance doesn’t only fall off based on your loan-to-value ratio. Lenders are also required to remove PMI once you reach the midpoint of your original repayment schedule, which would be the 15-year mark on a 30-year mortgage. This rule applies even if your LTV is still above 78%.

You don’t need to take any action to get the PMI removed. As long as your mortgage payments are current, your lender must automatically cancel PMI at the halfway point of your loan. 

4. Refinance to eliminate PMI

Refinancing can be an effective way to remove PMI, especially when your home’s value has increased. A higher appraised value or stronger equity position may qualify you for a new loan without mortgage insurance.

Before moving forward, it’s important to weigh the closing costs and review current interest rate trends. Comparing lenders can give you a clearer sense of the rates and terms available, and mortgage refinance companies like SoFi and Rocket Mortgage make it easy to get preapproved online.

Understanding what’s happening with mortgage rates can also help you decide whether the timing makes sense for your situation.

A mortgage refinance calculator can help estimate whether the long-term savings outweigh the upfront expenses. Refinancing isn’t right for everyone, but when the numbers work, it can be one of the fastest ways to remove PMI and reduce your monthly costs.

5. Repay your mortgage faster

Paying extra toward your principal is one of the simplest ways to reach the 20% equity mark sooner. Even small additional payments help your balance fall faster, which shortens the time it takes to remove PMI.

For example, the table below shows how an extra $50 each month can affect the timeline on a $270,000 mortgage with a 7% interest rate and 30-year term. With no extra payments, it takes about 9.6 years to reach a 78% loan-to-value ratio (LTV). Adding $50 per month reduces that to roughly 8.25 years.

Details	No extra payments	Extra payments
Original home value	$300,000	$300,000
Starting mortgage balance	$270,000	$270,000
Original LTV	90%	90%
Monthly P&I payment (7% rate, 30-year term)	$1,796.32	$1,796.32
Extra monthly principal payment	$0	$50
Time to reach 78% LTV	~8.25 years	~9.6 years

This approach doesn’t require refinancing or a new appraisal, and borrowers can adjust the extra amount to fit their budget. While the exact impact will vary based on loan size and interest rate, even modest principal payments can meaningfully speed up PMI removal.

The best option really depends on the client and their financial situation. If we have seen a period of solidly increase home prices then refinancing is typically the best option to get rid of your PMI, but you will want to understand that this is often resetting your payoff term and changes the total interest you end up paying over the long-term. It’s still likely better than paying PMI, but you just need to ensure you understand all impacts. If home values are stagnant, then paying the mortgage down faster is the best option, assuming your cash flow allows.

How long FHA mortgage insurance premiums (MIP) last

Instead of requiring PMI, government-backed FHA loans require borrowers to pay for mortgage insurance premiums (MIP). For most FHA loans originated after mid-2013, MIP lasts for the life of the loan or until it’s paid in full, whichever is earlier. 

Because FHA loans follow their own rules, homeowners should understand how mortgage insurance premiums work before making decisions about refinancing, budgeting, or long-term planning.

Common mistakes to avoid

Homeowners often miss opportunities to remove PMI simply because they don’t track their equity and request cancellation once they reach 80% LTV. Others may refinance into a less favorable loan or assume FHA mortgage insurance premiums follow the same rules as PMI. 

It’s also easy to overlook the cost of an appraisal or the impact of changing interest rates. Reviewing your lender’s requirements and running the numbers before taking action can help you avoid costly missteps.

PMI can be surprisingly costly. So getting rid of it as early as possible makes sense to free up cash flow for other expenses or to increase savings (either for retirement or building of an emergency fund). You don’t want to negatively impact your finances in other areas to pay this down, though, as it is a set cost. Where you may be running up credit card bills, which are not set, so you just need to balance the situation appropriately to best fit your personal financial situation.

Choosing the best PMI removal method

The right approach to removing PMI depends on your loan terms, equity position, and long-term plans. 

A new appraisal may make sense if home values have increased, while refinancing can be useful when interest rates are lower or when you want to adjust your loan structure. Extra principal payments work well for borrowers who prefer a simple, low-cost way to reach key equity milestones sooner.

No matter which path you choose, PMI doesn’t have to last for the entire life of your mortgage. Reviewing your loan statements, equity levels, and current rates regularly can help you decide when to take the next step.uce your mortgage costs sooner.