How to Get Rid of PMI: 6 Ways to Stop Paying Mortgage Insurance

For the first two years in our house, I paid an extra $140 every single month and barely noticed it. It was buried inside the mortgage payment, labeled "PMI," and I assumed it was just part of owning a home. Then my brother-in-law — who'd bought around the same time — mentioned he'd called his lender and gotten his PMI removed. Wait, you can just do that? I dug in that weekend, realized my home had gained enough value to qualify, and a couple of steps later that $140 was back in my pocket. Over the life of the loan, that's real money.Here's the thing nobody tells first-time buyers: PMI protects the lender if you stop paying — it does nothing for you. So the moment you can drop it, you should. This guide walks through exactly how to get rid of PMI: when it disappears on its own, the six ways to remove it early, how much equity you need, and why FHA loans play by different rules.

What Is PMI (and Why You're Paying It) 

Private mortgage insurance (PMI) is a fee lenders add to your monthly payment when you take out a conventional loan with less than 20% down. It exists to protect the lender if you default — you get no coverage or benefit from it yourself. PMI typically costs somewhere between 0.5% and 1.5% of your loan amount per year, which on a $300,000 loan can mean roughly $125 to $375 a month. Because it's pure cost with no upside for you, getting rid of PMI as early as possible is one of the easiest ways to lower your mortgage payment.

When Does PMI Go Away Automatically?

The good news: on a conventional loan, PMI doesn't last forever. Federal law (the Homeowners Protection Act) sets two automatic milestones based on your loan-to-value (LTV) ratio — how much you owe compared to the home's original value:

• At 80% LTV (20% equity): you can request that your lender cancel PMI.
• At 78% LTV (22% equity): your lender must cancel PMI automatically, as long as you're current on payments.
• At the loan's halfway point: if you somehow haven't reached 78% by the midpoint of your loan term, PMI is removed then anyway.

So even if you do nothing, PMI eventually falls off. But "eventually" can be years away — which is why most people want to speed it up.

How to Get Rid of PMI: 6 Ways If you don't want to wait for the automatic cutoff, here are the six proven ways to remove PMI early.

1. Request Removal at 20% Equity 

Once your balance hits 80% of the home's original value, you can formally ask your lender to cancel PMI. You'll usually need to make the request in writing, be current on payments, and have a clean payment history. This is the simplest route if you've been paying down your loan on schedule.

2. Pay Down Your Mortgage Faster

Making extra payments toward your principal gets you to that 20% equity mark sooner. Even small additional amounts each month — or one extra lump sum a year — can shave months or years off the timeline to drop PMI. Just confirm with your lender that extra payments are applied to principal.

3. Get a New Appraisal 

If home values in your area have risen, your equity may already be above 20% even if you haven't paid the balance down much. Ordering a new appraisal (and paying the few hundred dollars it costs) can prove your home is worth more, pushing your LTV below 80% and letting you request PMI removal early. This is the move that worked for me.

4. Refinance Your Mortgage

If you now have 20% or more equity, refinancing into a new conventional loan without PMI eliminates it entirely. Refinancing makes the most sense when rates are favorable and you'll stay in the home long enough to recoup the closing costs — otherwise the fees can outweigh the PMI savings.

5. Use Home Improvements to Boost Value

Renovations that increase your home's appraised value — like a kitchen update or finished basement — can raise your equity enough to cross the 20% threshold. Combined with a new appraisal (method #3), improvements you've already made can be the difference that gets PMI removed.

6. Refinance an FHA Loan into a Conventional One

 FHA loans carry mortgage insurance that often can't be cancelled the normal way (more on this below). If you have 20% equity and a solid credit score, refinancing out of an FHA loan into a conventional one is usually the only way to escape that insurance for good.

How Much Equity Do You Need to Remove PMI?

The magic number is 20% equity (an 80% LTV). At that point you can request cancellation; at 22% equity (78% LTV) your lender must remove it automatically. Equity can come from two places: paying down your loan balance, or your home's value going up. Both count — which is why a rising market can let you drop PMI faster than your payment schedule alone would.

Getting Rid of PMI on an FHA Loan (It's Different)

This trips a lot of people up: FHA loans don't have PMI — they have MIP (mortgage insurance premium), and it follows different rules. For most FHA loans taken out with a low down payment, MIP lasts for the life of the loan and can't simply be cancelled at 20% equity like conventional PMI. The standard way to get rid of FHA mortgage insurance is to refinance into a conventional loan once you have enough equity and qualifying credit. So if your goal is to stop paying mortgage insurance on an FHA loan, refinancing is almost always the answer.

Is It Worth Removing PMI? 

Almost always, yes. PMI is a cost that gives you nothing in return, so every month you remove it early is money saved. For a typical homeowner, dropping PMI can free up a few hundred dollars a year — often more. The main things to weigh are the small cost of an appraisal (if you go that route) or the closing costs of a refinance. As long as those one-time costs are smaller than what you'd keep paying in PMI, removing it is a clear win.

Run the Numbers on Your Mortgage

Before you request removal or refinance, it helps to see exactly where your equity and payment stand.

Use our Mortgage Calculator to estimate your current balance, payment, and how extra payments could get you to 20% equity faster — the fastest way to plan your exit from PMI.