Housing
Private mortgage insurance is what you pay for putting less than 20% down. You can request cancellation around 80% loan-to-value and it must drop automatically at 78% of the original value on most loans.
Updated 2026-09-08 · 8 min read
PMI protects the lender, not you, when you put less than 20% down. Typical cost is roughly 0.5–1.5% of the loan per year, paid monthly.
Putting 20% down to skip PMI is not always the winning move if that cash would empty the emergency fund or miss a 401(k) match. PMI is a fee. Running out of cash is a crisis.
1) Amortize and ask at 80% LTV — call the servicer; they will not always volunteer. 2) Automatic drop at 78% of original value on qualifying conventional loans if you are current. 3) Reappraisal or recast after a principal dump.
Keep the letters. If PMI is still drafting after you hit the threshold, escalate in writing. For FHA, run a refinance break-even instead of waiting.
Run the numbers: mortgage PITI calculator. A cash-out that pushes LTV back over 80% can put PMI on a loan that had already dropped it — HELOC vs cash-out.
On most conventional loans, request cancellation at 80% of original value (or current appraised value if the servicer allows). Automatic termination is typically 78% of original value if you are current.
Sometimes. If home prices rose, a new appraisal can show 20% equity even if amortization does not. FHA MIP is a different animal.
No. FHA annual MIP often lasts 11 years or the life of the loan. Removing it usually means refinancing into a conventional loan once you have the equity.
Educational only. Verify IRS limits and loan quotes before acting.