PMI — Private Mortgage Insurance

Q: How do I get rid of PMI?

Two ways under the federal Homeowners Protection Act . First: once your balance reaches 80% of the original purchase price you can submit a written request to your servicer — they may require a current appraisal. Second: even if you never ask, the servicer must cancel PMI automatically when your scheduled balance hits 78% of the original price. Requesting at 80% instead of waiting for automatic cancellation at 78% typically saves 12–24 months of premiums.

PMI is charged on US loans above 80% LTV. Here is what it costs, how it is calculated, when it falls off, and how it differs from Canadian mortgage insurance.

Updated August 2026

Private mortgage insurance protects your lender — not you — when you borrow more than 80% of a home's value. It adds a monthly charge to your payment for as long as you carry it, and it does nothing for you in return. That is why the moment you can cancel it is worth knowing precisely.

The diagram below shows how equity builds month by month and where the two key thresholds sit: the point where you can request removal, and the point where it must be cancelled automatically.

Real number examples

Example 1 — PMI cost on a $450,000 loan

Home price: $500,000. Down payment: $50,000 (10%). Loan: $450,000. LTV: 90%. At a mid-range PMI rate of 0.70%/year: $450,000 × 0.0070 ÷ 12 = $262.50/month. Over the roughly 8.5 years to reach 80% LTV at minimum payments, total PMI paid: approximately $26,775.

Example 2 — Putting 20% down instead

To avoid PMI on the same $500,000 home, you need $100,000 down instead of $50,000. The extra $50,000 earns you no PMI and a slightly lower rate. Savings over 8.5 years in PMI avoided: ~$26,775. That is a 53% return on the extra $50,000 before accounting for the reduced loan balance and lower rate — though the opportunity cost of that cash matters too.

Example 3 — Requesting removal 2 years early

If you reach 80% LTV on year 7 and request cancellation rather than waiting for the automatic 78% trigger on year 9, you avoid 24 months × $262.50 = $6,300 in premiums — often worth a single phone call and a $400 appraisal.

PMI rates by credit score and LTV (typical conventional loan)

Credit score	LTV 85–90%	LTV 90–95%	LTV 95–97%
760+	0.30–0.45%	0.45–0.65%	0.65–0.85%
720–759	0.45–0.65%	0.65–0.90%	0.90–1.10%
680–719	0.65–0.90%	0.90–1.15%	1.10–1.35%
Below 680	0.90–1.20%	1.15–1.50%	1.35–1.85%

Rates are illustrative ranges from Fannie Mae/Freddie Mac LLPA schedules. Actual rates vary by insurer and loan characteristics.

Frequently asked questions

How much does PMI cost?

PMI typically runs 0.3% to 1.5% of the original loan amount per year, split into monthly payments. The exact rate depends on your credit score, LTV, and loan type. On a $400,000 loan at 0.7% annually, that is $2,800/year or about $233/month. At a poor credit score and 95% LTV the rate can reach 1.5%, costing $500/month on the same loan. Getting a credit score above 760 before closing is one of the most effective ways to reduce PMI cost.

How do I get rid of PMI?

Two ways under the federal Homeowners Protection Act. First: once your balance reaches 80% of the original purchase price you can submit a written request to your servicer — they may require a current appraisal. Second: even if you never ask, the servicer must cancel PMI automatically when your scheduled balance hits 78% of the original price. Requesting at 80% instead of waiting for automatic cancellation at 78% typically saves 12–24 months of premiums.

Is PMI tax deductible?

PMI deductibility has varied with US tax law. The deduction expired after 2021 and has not been permanently reinstated as of 2026. Even when available, it phased out at higher income levels. Consult a tax professional for your specific situation — the IRS Topic 505 covers mortgage interest and insurance deductions. Do not rely on a potential deduction when deciding how much to put down.

What is the difference between PMI and MIP?

PMI (Private Mortgage Insurance) applies to conventional loans in the US. MIP (Mortgage Insurance Premium) applies to FHA loans. MIP has two components: an upfront premium of 1.75% of the loan amount paid at closing, and an annual premium of 0.45%–1.05% depending on LTV and term. The key difference: on most FHA loans originated since 2013 with less than 10% down, MIP lasts the entire loan life — it does not cancel at 80% LTV the way PMI does.

How is PMI different from CMHC insurance?

PMI is a monthly premium on US conventional loans above 80% LTV, charged indefinitely until you reach sufficient equity. CMHC (and Sagen/Canada Guaranty) mortgage default insurance in Canada is a one-time premium of 2.80%–4.00% of the insured loan, added to the principal at origination rather than billed monthly. Canadian default insurance is mandatory for any insured mortgage — it cannot be avoided by later reaching 20% equity the way US PMI can be cancelled.

Check your PMI cost

Enter your loan details in the calculator. The payment breakdown shows PMI as its own line and marks the month it drops off.