PMI Thresholds & Removal Guide

PMI must automatically terminate when your loan balance is first scheduled to reach 78% of the home's original purchase price, based on your original amortization schedule — regardless of whether you request it. Your lender is legally required to cancel it under the Homeowners Protection Act of 1998, as long as you are current on your payments. If you are behind on payments when you hit 78% LTV, automatic cancellation is delayed until the first day of the month after you become current.

On a 30-year fixed loan at 6.5%, the automatic termination point (78% LTV) is reached in approximately 12 years with 3% down, 10 years with 5% down, 7 years with 10% down, and 4 years with 15% down — based on minimum scheduled payments only. Making extra principal payments or refinancing after home appreciation can shorten this timeline significantly. You can also request cancellation one to two years earlier by reaching 80% LTV and submitting a written request.

Yes — if your home has increased in value, you may be able to remove PMI before your scheduled amortization would reach the threshold, but stricter LTV requirements apply. If your loan is between 2 and 5 years old, your loan balance must be 75% or less of the new appraised value. If your loan is more than 5 years old, the standard 80% LTV threshold applies. A new appraisal ($300–$500) is required in either case.

PMI costs between 0.15% and 1.55% of your original loan amount per year, depending on your credit score and down payment. On a $400,000 loan, that translates to $50/month at the low end (760+ credit score, 15% down) and up to $517/month at the high end (620 credit score, 3% down). The biggest driver of cost is your credit score — a borrower with a 680 score pays over $2,000 more per year in PMI than a borrower with a 760+ score on the same loan.

PMI applies to conventional loans and can be cancelled once you reach 80% LTV; FHA Mortgage Insurance Premium (MIP) applies to all FHA loans regardless of down payment and generally cannot be cancelled — it lasts for the life of the loan if you put less than 10% down (or 11 years with 10%+ down). FHA loans also charge a 1.75% upfront MIP at closing, which PMI typically does not. In most cases, borrowers with credit scores above 740 and a 5–10% down payment will pay less total insurance with a conventional loan and PMI than with an FHA loan.

The most common strategies are a piggyback loan (80/10/10), where a second mortgage covers 10% so the primary loan stays at 80% LTV; VA loans, which have no PMI for eligible veterans and active-duty military; USDA loans for rural properties; or lender-paid PMI (LPMI), where the lender covers PMI in exchange for a permanently higher interest rate. Each involves trade-offs — the alternatives table in this guide breaks down eligibility, costs, and long-term implications.

No. The federal PMI deduction (IRC §163(h)(3)) expired after tax year 2021 and has not been extended by Congress as of 2026. PMI premiums are not deductible on your federal return for 2026. Some states have separate deductions — check your state's tax rules or consult a tax advisor.