When Does PMI Actually Go Away on a Conventional Loan?
Private mortgage insurance (PMI) on a conventional loan is generally not permanent, unlike FHA mortgage insurance on lower-down-payment loans, which can last the life of the loan. But PMI also doesn't vanish automatically the moment equity crosses an intuitive threshold — there are specific rules governing exactly when and how it's removed. Two paths to removing PMI Automatic termination generally occurs when the loan balance is scheduled to reach 78% of the original property value, based on the original amortization schedule, regardless of current market value. This happens automatically, without the borrower needing to request it, as long as payments are current. Borrower-requested cancellation can generally happen earlier, once the loan balance reaches 80% of the original property value, but this typically requires the borrower to proactively request it in writing, and the loan usually needs to be in good standing with no other liens on the property. The difference...