Calculate your monthly private mortgage insurance.

Three ways to remove PMI from your mortgage

Unlike FHA mortgage insurance, conventional PMI is not permanent. The Homeowners Protection Act of 1998 gives you three ways to eliminate it — each with its own timeline and requirements.

The PMI cancellation checklist

Before contacting your lender, make sure you meet every requirement. Missing one will almost always result in a denial.

• Current on all mortgage payments (no 30-day lates in past 12 months)
• No 60-day lates in the past 24 months
• Loan balance is at or below 80% of original value
• No second mortgages, HELOCs, or liens on the property
• Request submitted in writing (email counts)
• Appraisal paid (if lender requires current-value basis)
• Property has not declined in value
• Reasonable waiting period met (2 years for current-value basis)

The removal timeline

Four strategies to avoid PMI entirely

If paying PMI feels painful, you have options. Each strategy has trade-offs — the right choice depends on your cash reserves, credit profile, and how long you plan to stay in the home.

1. Put 20% down (the classic route)

The simplest way to avoid PMI is to put 20% down on a conventional loan. On a $400,000 home, that's $80,000. Advantages: no PMI, lower monthly payment, immediate equity, better interest rate from most lenders. Disadvantages: delays homeownership by years for most buyers in high-cost markets, and tying up that cash means less for emergency reserves or investments.

2. Use an 80-10-10 piggyback loan

You take two mortgages simultaneously: a first mortgage for 80% of the home price, a second mortgage (usually a HELOC) for 10%, and you put down the remaining 10%. Because your first mortgage is only 80% LTV, no PMI is required. The second mortgage carries a higher interest rate (typically 2-3% above the first), but can be paid off quickly. Works best when the piggyback rate differential is lower than PMI would cost.

3. Lender-Paid Mortgage Insurance (LPMI)

Your lender pays the PMI upfront in exchange for giving you a slightly higher interest rate (typically 0.25% to 0.75% more). No separate monthly PMI line item appears. The downside: you cannot cancel LPMI like regular PMI. It stays for the life of the loan unless you refinance. Usually makes financial sense only if you plan to sell or refinance within 5-7 years.

4. VA and USDA loans (if eligible)

VA loans (for veterans, active military, and some surviving spouses) require no down payment and no monthly mortgage insurance. They charge a one-time funding fee of 1.25%-3.30% that can be rolled into the loan. USDA loans (for rural property in low-to-moderate income areas) require no down payment but charge a 1% upfront fee plus 0.35% annual guarantee fee. Both can save tens of thousands over the life of the loan if you qualify.

Common PMI mistakes to avoid

• Waiting for automatic cancellation when you qualify for request-based removal. You can request cancellation at 80% LTV; automatic happens at 78%. That 2% gap can mean 12-24 months of unnecessary PMI payments.
• Not tracking your amortization schedule. Most lenders will not proactively notify you that you're approaching 80% LTV. You have to track it yourself.
• Assuming home appreciation won't help. If your market has appreciated significantly, a current-value appraisal might get you to 80% LTV years ahead of schedule.
• Choosing LPMI without doing the break-even math. The higher interest rate on LPMI compounds over 30 years. Only worth it if you'll sell or refinance within 5-7 years.
• Not shopping lenders for PMI. Different lenders work with different insurers who have different rate cards. Shopping can reveal 10-20% rate differences.