PMI and mortgage insurance: what it costs and how to get rid of it

Last reviewed: October 29, 20267 min readMortgages

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Quick answer

Private mortgage insurance (PMI) protects the lender, not you, if you stop paying a conventional loan. You usually pay it when you put down less than 20%. Under the federal Homeowners Protection Act you can ask to cancel PMI once your balance is scheduled to reach 80% of the home's original value, and it generally ends automatically at 78% if you're current on payments. FHA loans use a different system, mortgage insurance premiums (MIP), and VA and USDA loans charge funding or guarantee fees instead.

When PMI applies

The CFPB explains that lenders usually require PMI on conventional loans when the down payment is under 20% of the purchase price. It's typically added to your monthly payment, though some lenders offer a single upfront premium or "lender-paid" PMI in exchange for a higher rate.

How PMI compares with other mortgage insurance

Loan	What you pay	Can it end?
Conventional	PMI, priced by the insurer and lender	Yes: by request at 80% LTV (original value), automatically at 78%, or at the loan's midpoint
FHA	MIP: 1.75% upfront plus an annual premium (0.55%/yr for most 30-year loans up to $726,200 with under 5% down)	After 11 years if you put 10% or more down; otherwise generally for the life of the loan
VA	One-time funding fee (2.15% first-use, under 5% down); no monthly insurance	No ongoing premium
USDA	Guarantee fee: 1% upfront and 0.35%/yr (FY2026 rates)	The annual fee applies for the life of the loan

Sources: CFPB, HUD Mortgagee Letter 2023-05, VA funding fee chart, USDA FY2026 notice.

How to remove PMI on a conventional loan

Ask at 80%. The CFPB says you have the right to request cancellation when your principal balance is scheduled to fall to 80% of the home's original value (the lower of the purchase price or appraised value at the time). Your PMI disclosure form shows that date. You generally need a good payment history, and the lender may require proof that the home hasn't lost value.
Automatic at 78%. Lenders must automatically end PMI when the balance is scheduled to reach 78% of original value, if you're current.
Final termination. PMI must end at the midpoint of the loan's amortization schedule if you're current, even if you haven't reached 78%.
Extra payments or rising value. Paying extra principal can get you to 80% sooner. Some lenders will consider a new appraisal; ask about their rules.

Is putting 20% down always better?

Not always. Avoiding PMI saves money, but draining your savings to do it can leave you without an emergency fund. Compare total cost with our mortgage calculator (you can enter a PMI rate from your Loan Estimate).

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Frequently asked questions

Does PMI protect me?

No. PMI protects the lender if you default. It does not cover your payments if you lose your job.

When can I stop paying PMI?

You can request cancellation once your balance is scheduled to reach 80% of the home's original value. It generally ends automatically at 78% if you're current on payments.

Can I cancel FHA mortgage insurance?

FHA MIP follows HUD's rules: it lasts 11 years with at least 10% down, and generally the life of the loan otherwise. Refinancing into a conventional loan is a common way out.

How much does PMI cost?

It varies by lender, insurer, credit score and down payment. Your Loan Estimate shows the actual amount for your offer.

Sources

CFPB: What is private mortgage insurance? (accessed October 29, 2026)
CFPB: When can I remove PMI from my loan? (accessed October 29, 2026)
HUD Mortgagee Letter 2023-05: FHA annual MIP rates (PDF) (accessed October 29, 2026)
VA: Funding fee and loan closing costs (accessed October 29, 2026)
Federal Register: USDA OneRD guarantee fee rates for FY2026 (accessed October 29, 2026)
CFPB: What is a loan-to-value ratio? (accessed October 29, 2026)

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Written by the Express Approvals editorial team. We check every figure against official sources such as the CFPB, HUD, VA, USDA, FHFA, the FTC, Freddie Mac and the Federal Reserve, and link them below. We are not a lender; this is general information, not personal financial advice. How we research and update guides.