For PMI cancellation, the federal 80% test uses your home’s original value. Extra principal payments can help you reach that threshold and request cancellation sooner, but reaching the balance alone does not automatically end borrower-paid private mortgage insurance. You must also meet the request requirements. CFPB guidance

This guide covers U.S. conventional mortgages on one-unit principal residences that closed on or after July 29, 1999. FHA insurance and lender-paid mortgage insurance follow different rules. Loans classified as high risk have special statutory provisions, so ask your servicer whether an exception applies before relying on the standard thresholds.

Find the original value for your current loan

The Homeowners Protection Act distinguishes purchase loans from refinances:

• Purchase: Use the lower of the contract sales price or the appraised value when the mortgage closed.
• Refinance: Use the appraised value the lender relied on to approve that refinance. The benchmark belongs to the refinance transaction, even if you bought the home years earlier.

These definitions come from 12 U.S.C. § 4901. An online home-value estimate or property-tax assessment does not replace that benchmark.

Gather your purchase contract, closing appraisal or refinance valuation records, PMI disclosure, and latest mortgage statement. Ask the servicer to confirm its recorded original value and identify the document supporting it. If the refinance involved an appraisal waiver, request the valuation basis in writing instead of substituting the old purchase price yourself.

Then calculate:

Original value × 0.80 = principal-balance threshold for requested cancellation.

The percentage applies to the property’s original value, not the original loan amount.

Separate a cancellation request from scheduled termination

The standard federal pathways have different triggers:

The CFPB explains these pathways. For fixed-rate loans, the statutory schedule is the initial amortization schedule; adjustable-rate loans use the schedule then in effect. Agreed loan modifications require the relevant dates to be recalculated for the modified terms.

Hypothetical example: an extra principal payment

Assume an eligible fixed-rate purchase mortgage with no modification. The home sold for $400,000 and appraised for $420,000 at closing. Original value is therefore $400,000.

Suppose the outstanding principal is now $335,000. A $15,000 payment applied entirely to principal would reduce it to $320,000—80% of original value. That satisfies the balance test for a cancellation request; the other requirements still apply.

The scheduled automatic-termination threshold is $312,000, or 78% of $400,000. The extra payment does not itself move the original scheduled date for reaching that amount. Even paying the actual balance down to $312,000 would not, by itself, advance the federal automatic-termination date. The CFPB’s August 4, 2015 compliance bulletin makes this distinction explicit.

Before committing cash, confirm how the servicer will apply it and review what extra principal does to a mortgage. Keep the posting confirmation with your cancellation request.

Prepare the request and supporting evidence

Ask the servicer for its submission instructions. Your written request should identify the loan, property, original value and cancellation basis: scheduled amortization or actual principal reduction. Include the relevant mortgage statement and proof of any extra payment, and retain proof of delivery.

Payment history: You must be current. The statutory test requires no payments 30 or more days late during the preceding year and no payments 60 or more days late during the year before that. The lookback runs from the later of the cancellation date or your request date. Check the payment record; being current today is only part of the test. Statutory payment-history definition

Other liens: The mortgage holder may require certification that your equity is not subject to a subordinate lien. Tell the servicer about any second mortgage or home-equity line and ask what certification or release documentation it requires. Federal cancellation requirements

Property value: The holder may require evidence that the home has not declined below original value. A servicer may require an appraisal at your expense. Before paying for one, ask which valuation it will accept, who must order it and what it will cost. For this pathway, the valuation checks for a decline; it does not replace original value with today’s higher estimate. CFPB compliance bulletin

Ask whether a current-value option applies

Appreciation may support a separate investor option. Ask who owns your loan and request the applicable current-value cancellation requirements, including loan age, payment history and valuation procedure.

For example, Fannie Mae’s guide published August 12, 2026 sets these current-value limits for a one-unit principal residence or second home:

• Loans two through five years old: loan-to-value ratio of 75% or less.
• Loans more than five years old: 80% or less.
• A waiver of the two-year minimum based on qualifying improvements that increased value: 80% or less.

An acceptable payment record and a valuation through the prescribed servicing process also apply. These are Fannie Mae’s investor requirements, not universal rules for every mortgage.

Read that guide alongside Fannie Mae’s September 16, 2026 lender letter. Effective immediately, the letter permits servicers to contact borrowers who may qualify through current value. Such outreach is an invitation to establish eligibility, not confirmation that insurance has ended.

Ask the servicer to name the pathway it is evaluating. A current-value investor threshold should not be substituted for the federal original-value test.

Check FHA insurance and lender-paid coverage separately

FHA annual mortgage insurance premiums are not conventional PMI. For FHA forward mortgages subject to annual premiums with case numbers assigned on or after June 3, 2013, original loan-to-value ratios of 90% or less generally mean premiums for 11 years or the mortgage term, whichever ends first. Above 90%, the duration is the mortgage term or 30 years, whichever ends first. Original LTV excludes financed upfront mortgage insurance. Earlier loans have different rules. HUD Mortgagee Letter 2013-04

HUD’s February 22, 2023 premium update retains the 11-year versus mortgage-term distinction in its duration tables. Ask for the rule applicable to your FHA case before sending a conventional 80% PMI request.

Lender-paid mortgage insurance is excluded from the federal borrower-paid cancellation provisions. Its cost usually appears through a higher interest rate. Paying principal to 80% does not create a right to remove that cost from the existing rate; the statutory disclosure describes coverage ending when the mortgage is refinanced, paid off or otherwise terminated. 12 U.S.C. § 4905

Confirm the result in writing

Keep making required payments while the request is pending. After cancellation, check the effective date, revised billing and any refund.

Federal law requires written confirmation within 30 days after cancellation or termination. If a request is denied, the notice must explain the grounds, including appraisal results used in the decision. Notice requirements

Unearned premiums must be returned within 45 days after cancellation or termination. Refund requirement

If the decision conflicts with your records, organize the discrepancy as a mortgage servicing question: identify the value, balance, date or evidence requirement in dispute. For an unresolved dispute over your rights, consult a housing counselor or attorney.

Once the revised billing is confirmed, use it to update your budget for ongoing ownership costs.