Franklin, Tenn. — October 2, 2026

Private mortgage insurance is the monthly cost many conventional borrowers carry when they buy with less than 20 percent down. Once equity grows—through scheduled principal paydown, extra payments, or a combination of time and home-value stabilityfederal rules give many homeowners a clear path to remove that premium. The Consumer Financial Protection Bureaus Ask CFPB guidance, last reviewed Aug. 28, 2026, explains when borrowers can cancel PMI and when servicers must terminate it automatically.

The framework applies to many mortgages on single-family principal residences that closed on or after July 29, 1999. Ending PMI reduces the monthly payment once the coverage drops off. FHA and VA loans follow different mortgage-insurance rules; borrowers on those products should ask their servicer rather than assume the conventional PMI calendar applies. If the lender—not the borrower—pays for mortgage insurance, different rules apply as well.

The first path is borrower-requested cancellation at 80 percent. Borrowers have the right to ask the servicer to cancel PMI on the date the principal balance is scheduled to fall to 80 percent of the home’s original value. That first eligible date should appear on the PMI disclosure provided with the mortgage; if the form is missing, the servicer can supply it. Borrowers may also request cancellation earlier if extra payments have already reduced the principal balance to 80 percent of original value.

“Original value” generally means the lower of the contract sales price or the appraised value at purchase. If the loan was refinanced, original value is the appraised value at the time of the refinance. That definition matters because cancellation rights track the loan’s documented original value, not a homeowner’s informal estimate of what the house might sell for today.

Under the CFPB’s summary of the legal requirements, the servicer must grant a cancellation request when the borrower meets the stated criteria: the request is in writing; the borrower has a good payment history and is current; the borrower can certify that there are no junior liens, such as a second mortgage, on the home; and, if required, the borrower can provide evidence—for example, an appraisal—that the property’s value has not declined below the original value. If value has fallen below that original-value benchmark, the borrower may not be able to cancel PMI on the scheduled 80 percent date even after principal has reached the ratio.

The second path is automatic termination at 78 percent. Even without a borrower request, the servicer generally must automatically terminate PMI on the date the principal balance is scheduled to reach 78 percent of original value, provided the borrower is current. If payments are behind, termination waits until shortly after the account is brought current.

The third path is the midpoint rule. The lender or servicer must end PMI the month after the borrower reaches the midpoint of the loan’s amortization schedule, even if the principal balance has not yet reached 78 percent of original value. The midpoint is halfway through the original full term—after 15 years on a 30-year loan. The borrower must be current for that termination to occur. The CFPB notes that the midpoint standard is especially relevant for structures with interest-only periods, principal forbearance, or balloon features, where scheduled principal may lag a simple 78 percent calendar.

Investor guidelines can be more borrower-friendly but not less. Loans backed by Fannie Mae or Freddie Mac often carry their own PMI cancellation standards. Those investor guidelines cannot be less favorable to the borrower than the federal floor described above. Homeowners should still confirm which path—borrower request, automatic 78 percent, midpoint, or an investor-specific earlier option—applies to their note and servicing file.

Appreciation can complicate the picture. The CFPB’s cancellation criteria tied to original value focus on whether the property has declined below that original-value mark when evidence is required; they do not turn a market-value gain alone into an automatic right to cancel at a new appraised peak. Borrowers who believe current market value has created substantial equity should review their disclosure dates, principal balance, and servicer requirements carefully, and should not assume an informal online estimate substitutes for whatever documentation the servicer requires.

For homeowners who bought with less than 20 percent down, the practical checklist is straightforward: locate the PMI disclosure or ask the servicer for the scheduled 80 percent and 78 percent dates; track principal balance against original value; keep payments current; understand junior-lien and valuation evidence requirements before sending a written cancellation request; and confirm whether Fannie Mae, Freddie Mac, or another investor guideline offers an earlier path. PMI is designed to protect the lender while loan-to-value is high. Once the statutory and investor thresholds are met, removing it is a payment reduction many conventional borrowers are entitled to pursue under rules the CFPB has spelled out in plain language.

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