PMI Removal Calculator

• Separates the 80% request point, the 78% automatic termination point and the appraisal-based route, which are three different things.
• Works the dates out from a real amortization schedule rather than estimating from an average.
• Shows what waiting for automatic removal instead of asking at 80% actually costs.
• Models extra principal payments and, optionally, appreciation.

How to use this calculator

Enter the home's value at the time the loan was written — the lower of the purchase price and the appraisal — along with the original loan amount, rate, term and your monthly PMI premium. If the loan has been running for a while, enter how many payments you have made.

The headline answer is the number of months until the balance reaches 80% of that original value, which is the point at which federal law gives you the right to request cancellation in writing.

The advanced fields add extra principal and an appreciation assumption. Extra principal moves the date forward on its own. Appreciation opens a separate route, but that one depends on the lender agreeing rather than on a legal right.

How the dates are worked out

The calculator builds the loan's full amortization schedule and finds the first month where the balance falls to or below each threshold:

Request point   = balance ≤ 80% of original value
Automatic point = balance ≤ 78% of original value
Appraisal route = balance ≤ 80% of value grown at the assumed appreciation rate

Under the Homeowners Protection Act, a borrower on a conventional loan may request cancellation once the balance reaches 80% of the original value, and the servicer must terminate the insurance automatically at 78%, provided payments are current. Both thresholds are measured against the original value, not today's — which is why a rising market does not accelerate them.

The third route uses current value and is not a statutory right at all. It usually needs a new appraisal at your expense, and lenders set their own bar — often 75% for the first couple of years.

A worked example

A $380,000 loan against a $400,000 home at 6.5% over 30 years starts at 95% loan-to-value. The scheduled payment is about $2,402, and PMI is $158 a month.

The balance falls to $320,000 — 80% of the original value — in month 124, a little over ten years. It reaches $312,000, the automatic termination point, in month 135. Those eleven months in between are worth $1,738 of premium: the price of not asking.

Paying an extra $400 a month brings the request point forward substantially, and the calculator reports both the months saved and the premium avoided.

How to actually get it removed

Cancellation at 80% is a request, not an automatic event, and servicers are not obliged to remind you. The request normally has to be in writing. The servicer can require that you are current on payments, that there is no second lien on the property, and in some cases evidence that the value has not declined.

Where the request rests on appreciation rather than on the scheduled balance, expect to pay for an appraisal from a list the servicer approves. Ask for their written policy before ordering one — the threshold, the seasoning period and the acceptable appraisers all vary, and an appraisal ordered on the wrong basis is money wasted.

None of this applies to FHA loans, where the insurance is structured differently and, for most loans written since 2013 with a small down payment, runs for the life of the loan. Removing it there normally means refinancing.

Assumptions and limitations

• Conventional loans only. FHA, USDA and VA loans have their own rules; VA loans have no monthly mortgage insurance at all.
• Fixed rate assumed. An adjustable-rate loan's balance follows a different path once the rate adjusts.
• Single-premium and lender-paid PMI are not modelled. Neither can be cancelled in the way monthly PMI can.
• The appreciation route is illustrative. It shows when the arithmetic would allow it, not whether a particular lender would agree.
• No escrow or payment changes. Property tax and insurance changes alter your total payment but not the PMI thresholds.

Common mistakes

Waiting for automatic removal. The gap between 80% and 78% is typically several months of premium for no benefit whatsoever.

Assuming a rising market helps. The statutory thresholds are measured against the original value. Appreciation only helps through a discretionary, appraisal-based request.

Assuming PMI ends when you reach 20% equity. Equity and loan-to-value diverge as soon as the value changes. It is the balance against the original value that governs.

Confusing PMI with the FHA's MIP. They serve the same purpose and behave completely differently at the end.

Frequently asked questions