Private Mortgage Insurance (PMI) is a type of insurance that protects your lender—not you—if you stop making payments on your conventional loan.
PMI is typically required when you make a down payment of less than 20% of your home’s purchase price. It’s a common cost for first-time homebuyers, but the good news is that PMI doesn’t last forever.
At ALCOVA Mortgage, we help homeowners understand when and how they can remove PMI, saving money and lowering monthly payments.
By law, your lender must automatically cancel PMI once your loan balance reaches 78% of the original purchase price (meaning you have 22% equity).
This typically happens around the halfway point of your loan term—for example, around year 11 of a 30-year mortgage—if you’ve made all payments on time.
However, you don’t have to wait for automatic cancellation. In many cases, you can request PMI removal earlier.
Here are four ways homeowners can remove PMI before it’s automatically canceled:
Once your loan-to-value ratio (LTV) drops to 80%, you can request PMI cancellation in writing. To qualify, you’ll usually need:
Your lender may also require a professional appraisal to confirm your home’s current market value.
Tip: Making extra principal payments each month can help you reach 20% equity faster. Use our mortgage calculator to see how additional payments affect your timeline.
If your home’s value has increased since you bought it, refinancing could be the fastest path to PMI removal.
By refinancing into a new loan with a lower loan-to-value ratio, you could:
Learn more about refinancing options and how they can help you save over the life of your loan.
If your property value has gone up significantly due to market trends or home improvements, a new appraisal could help prove you have 20% equity.
You can then submit a written request to your lender to cancel PMI. The lender will review your new appraised value and determine whether your current LTV meets the 80% threshold.
Even small additional payments toward your principal can add up over time. By paying extra each month—or making one additional full payment per year—you’ll build equity faster and reach that PMI-free milestone sooner.
Use ALCOVA’s mortgage payment calculator to plan your payoff strategy and estimate your potential savings.
There are certain cases where PMI may stay in place longer:
In these situations, your lender may require you to wait until you meet specific payment and value milestones.
If you have an FHA loan, your mortgage insurance is called Mortgage Insurance Premium (MIP)—not PMI. FHA mortgage insurance works differently:
To remove FHA MIP, you’ll likely need to refinance into a conventional loan once you’ve built enough equity. Learn more about loan options at ALCOVA to see if refinancing makes sense for you.
Getting Rid of PMI doesn’t just save you money each month—it can also:
On average, homeowners save $100–$300 per month after removing PMI. That’s extra cash you can use to invest, save, or upgrade your home.
At ALCOVA Mortgage, our goal is to help you make the most of your mortgage—from closing day to the day you own your home free and clear.
Whether you’re exploring ways to remove PMI, refinance your loan, or build equity faster, our experienced loan officers are here to help.
Learn more about refinancing, homeownership tips, and how ALCOVA can guide you toward financial freedom through smart mortgage management.
Contact your local ALCOVA Mortgage loan officer today to review your loan, calculate your home equity, and see if you qualify to remove PMI.
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