What Is PMI, and When Can It End?

What the premium buys

Private mortgage insurance can be required on a conventional mortgage with a smaller down payment. It protects the lender against borrower default; it does not protect the homeowner from losing the property. Pricing and payment structures vary, so use the premium from the actual offer rather than treating an example percentage as a quote.

Consumer Financial Protection Bureau [1]

A request is different from automatic termination

For covered loans, an original-value balance of 80% can support a cancellation request, subject to requirements such as a written request, current payments, payment history and property-value evidence. Scheduled automatic termination generally uses 78% with current payments. Midpoint termination is a separate protection. FHA, VA and lender-paid insurance are not governed by this simple conventional illustration. Confirm the rules for the specific loan.

Consumer Financial Protection Bureau [2]

Translate a premium into a budget

For a selected example of $360,000 financed at an annual PMI rate of 0.50%, the constant monthly premium is $150: $360,000 × 0.005 ÷ 12. This arithmetic says nothing about whether that rate is available. If the quoted premium is instead $95 per month, use $95 in the payment calculator.

At an original value of $400,000, the 80% balance is $320,000 and the 78% balance is $312,000. These are balance milestones, not a prediction of future home prices. An amortization schedule can estimate when principal reaches them.

Compare the cash trade-off

A larger down payment ties up more cash and reduces the loan. A smaller contribution may preserve reserves but add insurance cost. Compare the complete payment and the cash you keep, then test how long you expect to retain the loan. Upfront and monthly premium structures should be compared over the same horizon.

Do not assume a premium-free offer has no equivalent cost elsewhere. Review its rate and lender charges alongside the insurance-bearing option. The relevant question is the total cost and cash commitment for your circumstances, not whether one line of the quote is zero.

Prepare before the milestone

Keep the applicable disclosure, original value basis and payment history. As the estimate approaches the request month, ask the servicer what documentation and value evidence it requires. Continue paying the billed amount until the account is formally changed. The calculator estimates dates; it cannot authorize cancellation.

The tool’s constant premium and original-value schedule are deliberate simplifications. It does not model appreciation-based removal, delinquency, premium repricing or a refinance that changes the relevant original value.

Questions, answered

Sources

1. What is private mortgage insurance?. Consumer Financial Protection Bureau. 2023-12-21. Accessed 2026-09-09.
2. When can I remove private mortgage insurance (PMI) from my loan?. Consumer Financial Protection Bureau. 2026-08-28. Accessed 2026-09-09.