When Does PMI Automatically End? The 78% Rule, Explained

If you put down less than 20% on a conventional mortgage, you're almost certainly paying private mortgage insurance (PMI) — and most people assume they have to actively fight their servicer to ever get rid of it. For most borrowers, that's not true. A federal law, the Homeowners Protection Act of 1998 (HPA, also called the PMI Cancellation Act, 12 U.S.C. § 4901 et seq.), requires your servicer to drop PMI automatically once your loan balance falls low enough — no phone call required.

Two LTV thresholds, and they work differently

• 80% — you can request it. Once your principal balance reaches (or is first scheduled to reach) 80% of your home's original value, you can send your servicer a written cancellation request. They can also require you to have a good payment history (no payment 60+ days late in the last two years, none 30+ days late in the last year), be current, and — if the lender requires it — provide evidence the home hasn't lost value and confirm there's no subordinate lien on it.
• 78% — it happens automatically. Once the balance is first scheduled to reach 78% of original value, the servicer must terminate PMI on its own, as long as you're current on payments — the good-payment-history and property-value conditions that apply to the 80% request don't apply here. If you're behind at that point, termination happens on the first day of the month after you catch up.

Both thresholds are measured against your loan's original schedule — the amortization schedule set at closing (or the one then in effect, for an adjustable-rate loan) — not your actual payment history and not your home's current market value. Extra principal payments can only move these dates earlier if you also ask for cancellation once you hit 80% based on your real balance; the automatic 78% date, by contrast, is fixed at closing and doesn't move just because you paid extra (though you may still separately requalify for 80%-based cancellation sooner by actual payments).

The backstop nobody hits in practice: the midpoint rule

There's a third date that matters mainly for the loans the two rules above don't reach (see below): PMI must terminate by the first day of the month after the midpoint of your loan's amortization period — halfway between closing and the scheduled payoff date — as long as you're current, regardless of LTV. On the 30-year example above, that's month 180 (15 years in), well after either the 80% or 78% date would normally have already ended PMI on a standard loan. This provision matters because it also applies to loan types that are otherwise exempt from the 80%/78% rules entirely — see the next section.

What this law doesn't cover

• FHA and VA loans aren't PMI — they're a different kind of insurance, with different rules. The HPA explicitly excludes mortgage insurance under the National Housing Act (FHA) and VA-guaranteed loans. FHA's mortgage insurance premium (MIP) has its own separate cancellation rules, which for many FHA loans made since 2013 with under 10% down means MIP lasts for the life of the loan — refinancing into a conventional loan is often the only way out, not waiting for an LTV threshold.
• Lender-paid PMI (LPMI) doesn't get canceled this way at all. If your lender rolled the PMI cost into a higher interest rate instead of a separate premium (a similar trade-off to the “no-cost” refinance structure explained on our Refinance Calculator), the HPA's cancellation and automatic termination rights don't apply. LPMI ends only when the loan is refinanced, paid off, or otherwise ends.
• “High-risk” conventional loans lose the 80%/78% rights, but keep the midpoint backstop. Fannie Mae/Freddie Mac can designate certain conforming loans as high-risk, exempting them from the 80% request and 78% automatic-termination rules — they're still covered by the midpoint rule. Lender-defined high-risk (non-conforming / jumbo) loans get their own automatic-termination threshold instead: 77% of original value, rather than 78%.

What to actually do

• Find your original amortization schedule (your closing disclosures should include one, or ask your servicer) and figure out when your balance is scheduled to cross 80% and 78% of your home's original value — not today's market value.
• If you're past the 80% point on your real payment history (extra principal payments count), send a written cancellation request rather than waiting for the automatic 78% date — you don't have to wait if you've already paid down further than scheduled.
• Watch your annual servicer statement — the Act requires an annual written disclosure of your cancellation/termination rights and how to reach your servicer about them.
• If PMI hasn't dropped off by your scheduled 78% date and you're current on payments, that's worth a direct call to your servicer — the CFPB (which enforces the Act) is the right place to complain if a servicer won't act on a valid request.