If you’re paying Private Mortgage Insurance (PMI) each month, you’re probably wondering:
“When can I remove PMI?“
The good news is that PMI does not have to last for the life of your loan. In many cases, homeowners can remove PMI sooner than they realize, saving hundreds of dollars every month.
Here’s what you need to know.
What Is PMI?
PMI, or Private Mortgage Insurance, is typically required on a conventional loan when you put less than 20% down.
It protects the lender—not the homeowner—if the loan goes into default.
While PMI makes it possible to buy a home with a smaller down payment, most homeowners want to eliminate it as soon as they qualify.
When Can You Remove PMI?
There are several ways PMI can come off your loan.
1. Reach 20% Equity
The most common way to remove PMI is by reaching 20% equity in your home.
This can happen by:
- Paying down your mortgage balance
- Your home’s value increasing
- A combination of both
Once you reach this point, you can typically request that your loan servicer remove PMI.
2. Your Home Has Increased in Value
Utah homeowners have seen significant appreciation over the past several years.
If your home’s value has increased enough, you may already have 20% equity—even if you haven’t owned the home very long.
In many cases, your lender may require:
- A new appraisal
- A good payment history
- Confirmation that there are no additional liens on the property
Every loan servicer has its own requirements, so it’s worth asking what documentation is needed.
3. PMI Automatically Ends
Federal law requires conventional lenders to automatically cancel PMI once your loan reaches 78% loan-to-value (LTV) based on the original purchase price, provided you’re current on your payments.
That means even if you never request removal, PMI won’t stay forever.
However, many homeowners qualify to remove it earlier by requesting a review.
How Much Can Removing PMI Save?
The amount varies, but PMI commonly costs between $30 and several hundred dollars per month, depending on:
- Loan amount
- Down payment
- Credit score
- Type of mortgage
Removing PMI could reduce your monthly housing payment without changing your interest rate.
What About FHA Mortgage Insurance?
If you have an FHA loan, the rules are different.
Most FHA loans include Mortgage Insurance Premium (MIP) instead of PMI.
Depending on when you obtained your loan and how much you originally put down, MIP may last for many years—or even for the life of the loan.
In many situations, refinancing into a conventional loan is the best way to eliminate mortgage insurance.
Should You Refinance to Remove PMI?
Sometimes refinancing makes sense.
Other times, keeping your current interest rate and simply requesting PMI removal is the better financial move.
It depends on factors such as:
- Your current interest rate
- Your home’s value
- Your loan balance
- Today’s mortgage rates
- Your long-term plans
Running the numbers can help determine which option saves the most money.
How to Find Out if You Can Remove PMI
If you’re not sure where you stand, start by answering these questions:
- How much is your home worth today?
- What is your current mortgage balance?
- Is your loan conventional or FHA?
- How long have you owned the home?
With that information, it’s usually possible to estimate whether you’re eligible to remove PMI or if another strategy makes more sense.
Final Thoughts
Removing PMI can be one of the easiest ways to lower your monthly mortgage payment.
If your home has appreciated or you’ve built enough equity, you may qualify sooner than you think.
Before refinancing or making major financial decisions, it’s worth reviewing your options. A quick mortgage review can help determine whether requesting PMI removal, ordering an appraisal, or refinancing will save you the most money.
If you’d like to see whether you’re eligible to remove PMI, we’d be happy to help you review your mortgage and explore your options.
Written by Anthony VanDyke, Utah Mortgage Broker — NMLS #247102 — President at Houzd Mortgage in Draper, Utah.
A mortgage broker since 2006, Anthony has helped thousands of Utah families build a stronger financial future, one home at a time. He believes a mortgage isn’t just a loan — it’s a long-term financial strategy that can shape a family’s wealth and peace of mind.
👉 See what you qualify for with Anthony’s Purchase Qualifier Tool.