When can I stop paying mortgage insurance?

When conventional PMI ends

Private mortgage insurance on a conventional loan isn’t permanent. Under federal law, you can ask your servicer to remove it once your balance reaches 80% of the home’s original value based on your payment schedule, and it ends automatically at 78%. You can also get there sooner by paying extra.

Removing PMI early with a higher value

If your home has gained value, you may qualify sooner using a new appraisal. Under Fannie Mae’s rules, your balance generally needs to be 75% or less of the current value if you’ve had the loan between 2 and 5 years, or 80% or less after 5 years. You’ll also need a good payment history: typically no payment 30 days late in the past year and none 60 days late in the past two.

FHA mortgage insurance

FHA works differently. If you put down less than 10%, the annual premium lasts for the life of the loan; with 10% or more, it ends after 11 years. The usual way out is refinancing to a conventional loan once you have enough equity, ideally 20% so no PMI is needed.

Example

On a $400,000 home bought with a $380,000 loan at 6.5%, the balance reaches 80% of the original value after roughly 8 to 9 years of regular payments. Extra payments or rising home values can shorten that.

Getting there faster

Extra principal payments bring your balance to 80% sooner, and improvements that add value can help with a new appraisal. Before paying for an appraisal, ask your servicer which appraisal they’ll accept and what value you’d need. The monthly savings often pay back the appraisal cost within a few months.

Questions buyers ask