PMI is the price of putting less than 20% down on a conventional loan, and federal law says when it has to come off.
Private mortgage insurance protects the lender, not you. You pay it so the lender can approve a smaller down payment. This post covers what PMI is, when it ends, how to remove it early, and how it compares to FHA, VA, and USDA.
Last updated: November 13, 2026
Guidance reference: Homeowners Protection Act, via the CFPB; HUD mortgage insurance rules (2023); VA funding fee table; USDA Single Family Housing Guaranteed Loan Program overview (January 2026)
PMI on a Mortgage: The Short Answer
As of November 2026: PMI is insurance a conventional lender requires when you put down less than 20%. You can ask to cancel it when your balance is scheduled to reach 80% of the original value, and it must end automatically at 78% if you are current (CFPB, Homeowners Protection Act). FHA mortgage insurance follows different rules (HUD mortgage insurance rules (2023)), and VA loans have no monthly mortgage insurance (VA funding fee).
What Is PMI?
PMI stands for private mortgage insurance. If a borrower stops paying, the insurance pays the lender part of the loss. That protection is why a conventional lender can approve you with 3% to 19% down instead of 20%.
You pay the premium, usually as part of your monthly payment. The cost depends on your credit score, your down payment, and the loan. We show it on your estimate before you write an offer.
When PMI Comes Off
For a conventional loan on your main home, the Homeowners Protection Act sets three points.
| Point | What happens | Conditions |
|---|---|---|
| 80% of original value | You can ask to cancel | Written request, good payment history, current, no second lien, proof the value has not dropped |
| 78% of original value | PMI ends automatically | You are current on payments |
| Midpoint of the loan | PMI must end | Year 15 on a 30-year loan, if you are current |
Source: CFPB, Homeowners Protection Act.
Original value is usually the lower of your purchase price or the appraised value when you bought. After a refinance, it is the appraised value at the refinance. The 80% and 78% points are based on your scheduled balance, not on today’s market value.
How to Get Rid of PMI Early
Find your 80% number
Multiply your original value by 0.80. On a $400,000 home, that is a balance of $320,000.
Pay extra principal if you want to get there sooner
Extra payments that bring your balance to 80% early let you ask for cancellation early.
Ask in writing
Send your servicer a written request. Ask what proof of value it needs.
Keep a clean payment record
You need a good payment history and to be current, with no second mortgage or other lien on the home.
Some loan investors also allow removal based on a new, higher home value after a waiting period. Those rules come from the investor, not federal law. Ask your servicer what it allows.
Running the numbers on less than 20% down? We show the payment with and without mortgage insurance.
See What I Qualify ForPMI vs. FHA, VA, and USDA
| Loan | What it charges | When it ends |
|---|---|---|
| Conventional (PMI) | Monthly premium, priced by score and down payment | Ask at 80%; automatic at 78%; midpoint at the latest |
| FHA (MIP) | 1.75% of the base loan upfront plus a yearly premium, usually 0.55% | Life of the loan with less than 10% down; 11 years with 10% or more |
| VA | No monthly mortgage insurance; one-time funding fee unless exempt | No monthly premium to remove |
| USDA | 1% upfront guarantee fee plus 0.35% annual fee | Annual fee is paid on the remaining balance |
Source: CFPB; HUD mortgage insurance rules (2023); VA funding fee table; USDA program overview, January 2026.
FHA’s yearly premium is on loans longer than 15 years with a base loan of $726,200 or less; see our FHA loan requirements for the full table. The base loan is what you borrow before the upfront premium is added.
If you served, a VA loan is usually the strongest way to skip monthly mortgage insurance. VA has no minimum credit score from the VA or from us; VA still reviews your credit, your income, and the home.
Ways to Avoid PMI
- Put 20% down on a conventional loan.
- Use a VA loan if you are eligible. There is no monthly mortgage insurance.
- Ask about lender-paid mortgage insurance. The lender pays the premium in exchange for a higher rate, and it does not come off at 80%.
- Pay it for now and plan to remove it. On many loans, PMI comes off years before the loan is paid off.
The cheapest choice depends on how long you will keep the loan. We compare them side by side on your numbers.
PMI Myths
❌ Myth: “PMI protects me if I lose my job.”
✅ Fact: PMI protects the lender, not you. It does not make your payment if you cannot.
❌ Myth: “PMI never goes away.”
✅ Fact: On a conventional loan for your main home, federal law sets when it can be cancelled and when it must end.
❌ Myth: “FHA mortgage insurance drops off at 20% equity too.”
✅ Fact: That is how conventional PMI works. With less than 10% down, FHA mortgage insurance stays for the life of the loan unless you refinance.
PMI FAQ
What is PMI on a mortgage?
PMI, or private mortgage insurance, is insurance that protects the lender on a conventional loan when you put down less than 20%. You pay for it, usually as part of your monthly payment. It does not protect you; it is what lets the lender approve a smaller down payment.
When does PMI go away?
On a conventional loan for your main home, you can ask to cancel PMI when your balance is scheduled to reach 80% of the original value. It must end automatically when the balance is scheduled to reach 78%, and no later than the midpoint of the loan, if you are current on payments.
How do I get PMI removed?
Send your servicer a written request once your balance reaches 80% of the original value, by schedule or with extra payments. You need a good payment history, no second mortgage or other lien, and proof the home has not lost value, such as an appraisal.
Is FHA mortgage insurance the same as PMI?
No. FHA mortgage insurance, called MIP, follows HUD’s rules. It costs 1.75% of the base loan upfront plus a yearly premium, usually 0.55%. With less than 10% down, it lasts for the life of the loan. With 10% or more down, it ends after 11 years.
Do VA loans have PMI?
No. VA loans have no monthly mortgage insurance. Instead, most VA borrowers pay a one-time funding fee, which can be added to the loan. Veterans who receive VA disability compensation are exempt from the funding fee.
Does USDA have PMI?
USDA loans do not have PMI. They have a guarantee fee instead: 1% of the loan upfront, which can be financed, and an annual fee of 0.35% paid monthly.
Can extra payments get rid of PMI sooner?
Yes. If extra principal payments bring your balance down to 80% of the original value early, you can ask your servicer to cancel PMI at that point. You still need a good payment history and proof the home has not lost value.
Is PMI tax deductible?
It depends on the tax year. For 2025, the IRS says mortgage insurance premiums, including PMI, cannot be deducted. For 2026, the IRS’s draft Publication 936 says you can treat qualified mortgage insurance, including private mortgage insurance, as home mortgage interest if you itemize your deductions and the loan was used to buy, build, or improve your main or second home. The amount you can deduct shrinks once your adjusted gross income (AGI) is over $100,000 and is gone over $109,000. If you are married filing separately, those amounts are $50,000 and $54,500. This is a draft IRS publication that explains the rule; it does not make the law, and the final version controls. Ask a tax professional about your return; we do not give tax advice. Source: IRS Publication 936 (2026 draft).
Related Pages
About the Author
J.D. Peck is an Area Manager and Mortgage Loan Originator (NMLS #314883) with the JD.Mortgage Team at Paramount Residential Mortgage Group, Inc. (NMLS #75243), based in Colorado Springs. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: November 13, 2026. Mortgage insurance facts sourced from the CFPB (Homeowners Protection Act), HUD mortgage insurance rules (2023), the VA funding fee table, and USDA Rural Development.
Source: JD.Mortgage Team at PRMG, PMI on a Mortgage, updated November 2026, https://jd.mortgage/pmi-mortgage/
See Your Payment With and Without PMI
We compare conventional, FHA, VA, and USDA on your numbers, including mortgage insurance and when it ends.
What are you looking to do?
No SSN required. No credit pull. Takes about 2 minutes.