When Is PMI or FHA Mortgage Insurance Required, and How Do I Remove It?

What triggers PMI on a conventional loan, and how much does it cost?

PMI protects the lender, not you, when a conventional loan is made with less than 20% down. Putting 20% down avoids PMI entirely. Below that, PMI typically costs roughly $25 to $90 a month, or adds roughly 0.5% to 0.8% to your effective interest rate, depending on your credit score and loan size. Some lenders also offer lower down payment options that still avoid standard PMI: many lenders commonly offer a program that removes PMI once a borrower reaches 15% down, instead of the usual 20% threshold, so it's worth asking a loan officer what a specific lender allows.

How does FHA mortgage insurance (MIP) differ from conventional PMI?

FHA loans generally require mortgage insurance regardless of how much equity you have. The rule depends on your original down payment and when your FHA case number was assigned. For case numbers dated June 3, 2013 or later, a down payment under 10% (the typical FHA minimum is 3.5%) means MIP is expected to last for the life of the loan. Only a down payment of 10% or more on those loans qualifies for automatic MIP cancellation, and even then only after 11 years. Loans with case numbers from before June 3, 2013 follow older rules: some cancel once the balance reaches 78% loan to value, while loans originated between 1991 and 2000 may not cancel at all.

How do you actually get mortgage insurance removed?

On a conventional loan, you can request PMI cancellation once your balance reaches 80% of the home's original value (20% equity), and the servicer must automatically terminate it at 78% (22% equity) as long as you're current on payments. On an FHA loan, most borrowers who put down less than 10% will need to refinance into a conventional loan to drop MIP, since automatic cancellation generally does not apply to them. Refinancing also ends the loan through payoff, and automatic cancellation at 11 years is available to the smaller group who put down 10% or more. Before refinancing just to remove MIP, run the numbers, since first-lien refinance rates are commonly running roughly 6% to 7% as of 2026-07, and closing costs need to be weighed against the monthly MIP savings.

It depends on your situation

• If you have a conventional loan and put down less than 20%: PMI typically cancels automatically around 78% LTV, and you can request removal earlier at 80% LTV if you're current on payments.
• If you have an FHA loan with a case number from June 3, 2013 or later and put down less than 10% (a typical FHA down payment): MIP is expected to last for the life of the loan, and refinancing into a conventional loan is generally the main way to remove it before payoff.
• If you have that same type of FHA loan but put down 10% or more: MIP is scheduled to cancel automatically after 11 years.
• If your FHA loan has a case number from before June 3, 2013: older cancellation rules apply, and they vary by origination year, so check your specific loan documents.
• If you want to avoid PMI without a full 20% down payment: ask a loan officer about the lower down payment PMI-avoidance programs some lenders offer, as noted above.

Related questions

• what's the Difference Between an FHA Loan and a Conventional Loan
• what down-payment assistance and first-time-homebuyer programs exist, and how do they work
• do I Still Qualify as a First-Time Homebuyer If I Haven't Owned a Home in the Last 3 Years
• what Is a DSCR Loan, and How Does It Let You Qualify for an Investment Property Without Proving Personal Income
• minimum credit score to qualify

Sources

• https://files.consumerfinance.gov/f/documents/102012_cfpb_homeowners-protection-act-hpa-pmi-cancellation-act_procedures.pdf
• https://yourhome.fanniemae.com/buy/private-mortgage-insurance
• https://www.bankrate.com/mortgages/remove-fha-mortgage-insurance
• https://www.rocketmortgage.com/learn/fha-mortgage-insurance-removal