5 fast facts about cancelling mortgage insurance

By Robin Wetherbee

September 2015
  1. You may be able to cancel when your mortgage balance reaches 80% of your home’s original value
  2. You may be able to cancel when your equity reaches 20%-25% of your home’s current value due to your home’s value appreciating
  3. Your lender must automatically cancel your mortgage insurance when you have 22% equity in your home
  4. Your mortgage payments must be current
  5. You’ll need to submit your request to cancel in writing to your lender — not the mortgage insurance provider

2 bonus tidbits about cancelling mortgage insurance

  • You may need to get an appraisal to verify the value of your home
  • Your lender may have additional requirements


By what standard does the lender use as “value”? My construction loan was just north of 80%, now that I’ve made sufficient payments to get under that percentages, my lender is telling me that my value was set by my construction cost, even though I paid for an appraisal and it far exceeds this value?? Any insight?

Liz - Readynest Editor

Bryan, lenders have their own guidelines for considering MI cancellation based on the current value of the home (as established by an appraisal as you have done), versus the original value established when you took out the loan. You may want to ask for clarification to find out exactly what mortgage balance level you need to reach to cancel MI.

Melynda Townsend

Very informative


Very informative and helped me understand home buying! Thank you

ahmad khalid

Yes i understand


There is an specific term for me to cancel a PMI payment after the closing? Let say that I bought this property 6 months ago and today the value have reach to justify a 22% equity, I am eligible to request PMI cancellation ?

Liz - Readynest Editor

Angel, there is generally no "minimum" term you must pay PMI before it can be cancelled, as long as you have enough equity in the property. To know for sure, you should call your lender to ask about terms and conditions, and how to request cancellation if you qualify.

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Robin Wetherbee has been writing for MGIC about mortgage insurance and homeownership since 1989. She and her handsome husband reside in Milwaukee’s Bay View neighborhood. They share their freshly empty nest, which she calls her “Miracle on 34th Street” house (if you’ve seen the 1947 movie, you’ll know exactly what she means) with their big old black cat, Max Rayfield Gilhooly.
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