Guide
PMI removal rules under the Homeowners Protection Act
Learn the national PMI cancellation rules: borrower requested cancellation at 80 percent loan to value, automatic termination at 78 percent of original value, and final termination at the midpoint of your loan.
What the Homeowners Protection Act covers
The Homeowners Protection Act of 1998 is a federal law. It sets national rules for cancelling private mortgage insurance on many conventional loans originated on or after July 29, 1999. It is not a state by state program. If your loan is a typical conventional first mortgage on a primary residence, these rules are the starting point, even if your servicer is in another state.
Borrower requested cancellation at 80 percent
You can ask your servicer to cancel PMI when the unpaid principal reaches 80 percent of the original value of the home, based on actual payments. You generally must be current, have a good payment history, and have no subordinate liens. The property value should not have declined. Many servicers also accept a current appraisal if home prices have risen and your current loan to value is 80 percent or less.
Automatic termination at 78 percent
If you do not request cancellation earlier, PMI must terminate automatically when the principal balance reaches 78 percent of the original value according to the amortization schedule, provided you are current. This protection does not depend on a new appraisal. It is tied to original value.
Final termination at the midpoint
Even if loan to value is still high, PMI must end at the midpoint of the amortization period if you are current. On a 30 year loan that is the 15 year mark. On a 15 year loan it is 7 years and 6 months. This is a backstop so PMI cannot last for the entire original term on a covered loan.
What the Act does not cover
FHA mortgage insurance, VA funding fees, and USDA guarantee fees are not PMI under this Act. Lender paid PMI is treated differently. Second homes and investment properties often fall outside the core consumer protections. Always match the rule set to your loan type.
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