Mortgage questions
How long do I have to pay PMI?
On a conventional loan, PMI (private mortgage insurance, a monthly charge that protects the lender if you stop paying) usually ends automatically when your remaining balance is scheduled to reach 78% of the home's original value. You can ask the lender to cancel it earlier, once the balance reaches 80% of that original value. The clock runs on your original value and your payment schedule, not on what your home is worth now.
The clock is set by your original value, not today's price
PMI is tied to how much you borrowed compared with what the home was worth on the day you bought it. That starting number is fixed for the life of the loan. If you bought for a certain price with a small down payment, the lender records that original value and measures your balance against it every month. Here is the part that surprises people. If home prices rise, your equity grows, but the automatic PMI end date does not move up. Say you put down a modest amount and your balance is still well above the 80% mark. If your neighbor's identical house sells for more, that does not shorten your PMI. The lender is still comparing your balance to the original value. A refinance is different. A new loan comes with a new appraisal and a new original value, so a refinance is one of the few ways to reset the comparison in your favor. That is worth knowing if you are years into a loan and your home has gained value.
Two dates matter: when you can ask, and when it ends on its own
You have two levers. The first is a request you make. Once your balance reaches 80% of the home's original value, you can ask the lender to cancel PMI. The lender will usually want a good payment history and may require an appraisal or a broker's price opinion, which is a cheaper written estimate of value. The second lever is automatic. When your balance is scheduled to reach 78% of the original value, the lender must end PMI on its own, with no request from you. That is why the two numbers differ: 80% is your invitation to ask, 78% is the lender's deadline. Here is a worked example in words. Suppose you bought with a down payment of one-tenth of the price, so you borrowed nine-tenths of the home's value. On a standard repayment schedule, your balance crosses the 80% line after several years of payments, and the 78% line a bit later. The exact month depends on your rate and term, which is why the lender's schedule, not a rule of thumb, is the thing to check. Ask your servicer for the projected date in writing.
Where to find your dates on your own paperwork
You do not have to guess. Your closing paperwork includes a PMI disclosure that states the estimated date your insurance will end and the date it ends automatically. Find that page and put both dates in your calendar. Then check your annual escrow statement. PMI usually rides inside your monthly payment and is listed there as a separate line, so you can see exactly what you are paying each year. If you are comparing loan offers, the Loan Estimate shows the PMI premium in the projected payments section, which lets you compare the true monthly cost of two offers side by side rather than just the rate. One more detail: if you reach the 80% mark through extra principal payments rather than the regular schedule, the cancellation rules can differ, and lenders often require the balance to hit that level on the original schedule before the automatic end applies. Ask your servicer how extra payments affect your specific loan before you count on an earlier date.
The trade-off: paying PMI versus paying points or a bigger down payment
PMI is not automatically the wrong choice. It lets you buy with less cash down and keep reserves for repairs and emergencies. The trade-off is a monthly cost that does nothing for your equity. Compare the alternatives honestly. A larger down payment removes PMI sooner but ties up cash. Paying discount points, which is an upfront fee for a lower rate, reduces your rate but does not remove PMI. A lender credit gives you lower closing costs in exchange for a higher rate, which also does not touch PMI. Each choice moves a different number. The flip point is how long you plan to stay. If you expect to sell or refinance within a few years, the monthly PMI cost may be smaller than the cash you would have to lock up to avoid it. If you plan to stay for a long time, shortening the PMI period is usually worth more. Run both paths with real numbers before you decide. Ralo is a broker, not a lender, and earns a thin commission arranged in advance with each lender, so the compensation does not change based on which rate or terms you pick. That matters here because it means the person helping you compare a bigger down payment against PMI has no incentive to steer you toward a higher rate. You can also check published rate data on this site to see how today's pricing compares across loan types before you commit.
How to shorten the PMI period without waiting
Three moves shorten the clock. First, pay extra principal when you can, and confirm with your servicer how those payments affect your cancellation date. Second, ask for cancellation the moment you cross the 80% mark rather than waiting for the automatic end. Third, consider a refinance if your home has gained value and your credit has improved, because a new appraisal can reset the original value and drop PMI entirely. Before you refinance, do the math on closing costs. A refinance only pays off if the monthly savings outrun the cost of the new loan within the time you plan to stay. A refinance calculator makes that comparison concrete. If you are shopping for a new loan and want to know how different down payments change your monthly payment, ask each lender for a Loan Estimate at two down payment levels. That single comparison shows you the PMI cost in dollars and lets you decide whether the extra cash is worth it.
Figures used on this page
| Figure | Value | Source |
|---|---|---|
| When you can ask to cancel conventional PMI | When the balance reaches 80% of the home’s original value | CFPB |
| When conventional PMI ends automatically | When the balance is scheduled to reach 78% of the original value | CFPB |
| Broker compensation structure | fixed in advance per lender; cannot vary with your rate or terms | CFPB loan originator compensation rule (Regulation Z) |
| Where each appears on the Loan Estimate | Points in Section A, Origination Charges; credits as a separate Lender Credits line in Section J | CFPB, Loan Estimate explainer |
Ralo is an automated mortgage broker — not a lender — that compares multiple lenders from one application, earns a thin commission, and shows rate, APR, and fees upfront. Rates shown anywhere on this site are illustrative examples, not a loan approval, rate lock, or commitment. Available where licensed: California, Colorado, and Texas.