When Does PMI Drop Off? 78% vs 80% LTV Explained
Updated June 2026 · Educational guide, not financial advice
For most conventional loans, private mortgage insurance (PMI) drops off automatically once your loan balance reaches 78% of the home's original value on your original payment schedule, as long as you're current on payments. You can also request cancellation a little earlier, at 80% LTV, and there's a final backstop at the midpoint of your loan term.
What PMI is and why it ends
PMI is insurance that protects your lender (not you) if you stop paying. Lenders typically require it on conventional loans when you put down less than 20%. The good news: it isn't permanent. A federal law called the Homeowners Protection Act (HPA) of 1998 spells out exactly when borrower-paid PMI must end, so you're not stuck paying it for the life of the loan. The rules below apply to most loans on a single-family primary residence that closed after July 29, 1999.
One important detail up front: these LTV thresholds are measured against your original value — the lower of the purchase price or the appraised value at closing — not whatever your home is worth today. That distinction drives almost everything below.
The three ways PMI comes off
1. Automatic termination at 78% LTV
This is the one most people mean when they ask when PMI drops off. Your servicer must automatically cancel PMI on the date your principal balance is first scheduled to reach 78% of the original value, based on your original amortization schedule. Two things make this clean and predictable:
- It's tied to the scheduled balance, so the date is set the day your loan closes — you can read it off your full amortization schedule.
- You don't have to ask. The servicer is required to do it for you.
The one condition: you must be current on your payments on that date. If you're behind, termination happens on the first day of the first month after you bring the loan current.
2. Borrower-requested cancellation at 80% LTV
You can get there sooner by asking. When your balance reaches 80% of the original value, you have the right to request cancellation in writing. Because this is earlier than the automatic point, it can save you a few extra months of premiums — but the burden is on you to initiate it, and the lender can attach conditions:
- A good payment history (generally no payment 30+ days late in the last year and none 60+ days late in the last two years).
- Proof, sometimes via a new appraisal you pay for, that the home's value hasn't dropped below the original value.
- Certification that there's no second lien (like a HELOC) on the property.
3. Final termination at the loan's midpoint
There's a safety net. Even if your balance somehow hasn't hit 78% on schedule — which can happen on certain loan structures — PMI must end at the midpoint of your amortization period. On a 30-year loan that's after 15 years; on a 15-year loan it's at 7.5 years. This applies regardless of your actual balance, as long as you're current.
A worked example
Say you buy a home for $320,000 and put 10% down, so your starting loan is $288,000 (90% LTV) on a 30-year fixed at 6.5%. Your original value is $320,000.
- 80% LTV (request): 80% of $320,000 = $256,000. On the original schedule, your balance crosses below $256,000 a little under 5 years in. That's the earliest you can ask the lender to cancel.
- 78% LTV (automatic): 78% of $320,000 = $249,600. Your scheduled balance reaches that point around 5.5 years in — and the servicer must cancel without you lifting a finger.
If your PMI runs about $130 a month, requesting cancellation at the 80% point instead of waiting for the 78% auto-date could save you roughly six months of premiums — close to $780. Not life-changing, but real money for one letter.
How extra payments change the timeline
Here's where you have leverage. The 78% automatic date is locked to your original schedule and won't move no matter how fast you pay. But the 80% borrower-request right is based on your actual balance — so paying extra principal gets you to 80% sooner.
In the example above, adding $250 a month in extra principal would push your actual balance below $256,000 well ahead of schedule, letting you submit your cancellation request earlier and stop paying PMI sooner. You can model exactly when your balance crosses these lines with our mortgage payoff calculator, or download a month-by-month table from the amortization schedule tool and find the row where your balance dips below 80% and 78% of your original value.
The new-appraisal angle
Because the legal thresholds use original value, rising home prices don't automatically help under the HPA. But many servicers have their own programs that let you cancel based on current value if you pay for a new appraisal — often allowing cancellation once you reach 75% or 80% of the appraised value, with the exact rules varying by investor (such as Fannie Mae or Freddie Mac) and how long you've owned the home. If your area has appreciated a lot, it's worth asking your servicer what they require.
A few more things to keep in mind: these rules cover borrower-paid PMI on conventional loans. Lender-paid PMI (baked into your rate) and FHA mortgage insurance follow different rules — FHA's MIP often lasts the life of the loan unless you refinance. And the HPA applies to your primary residence; investment and vacation properties can have different thresholds.
Key takeaways
- PMI automatically drops off at 78% LTV based on your original schedule and original value, provided you're current — no action needed.
- You can request cancellation earlier at 80% LTV, but you must ask in writing and may need a good payment history and proof of value.
- A final backstop cancels PMI at the loan's midpoint (year 15 of a 30-year loan), regardless of balance.
- Extra principal payments speed up the 80% request date, but not the locked-in 78% automatic date.
- Thresholds use original value unless your servicer lets you cancel based on a new appraisal — useful if your home has appreciated.