The short answer: If you have a conventional loan and pay private mortgage insurance (PMI), you may be able to cancel it without refinancing. You can ask once your balance reaches 80% of the home's original value. It ends on its own at 78%. If your home has gone up in value, Fannie Mae and Freddie Mac loans can also qualify based on today's value, at 75% after two years or 80% after five, with a new appraisal and a clean payment history. Since September, Fannie Mae servicers can contact you when you may qualify. FHA mortgage insurance follows different rules, and on many FHA loans it lasts as long as the loan.
As of November 13, 2026. Rules come from the CFPB, Fannie Mae and HUD pages cited below. Your servicer and loan investor decide your actual eligibility.
Why is PMI in the news right now?
Two federal moves this fall. On September 16, at the direction of the Federal Housing Finance Agency, Fannie Mae said servicers may now proactively contact borrowers whose loans are near or at the loan-to-value thresholds for ending mortgage insurance based on current property value, effective immediately (Orrick InfoBytes summary of Fannie Mae Lender Letter LL-2026-07). Freddie Mac already allowed that outreach. As FHFA Director Bill Pulte put it, Fannie previously "will not let your loan company call and tell you that you may qualify" (HousingWire, September 15, 2026).
Then on October 22, the White House said an executive order directs the FHFA Director to create a pilot program that would cancel mortgage insurance proactively "once they have satisfied their equity requirements based on the current market value" (White House fact sheet, October 22, 2026). The fact sheet gives no start date, so for now, cancellation still mostly depends on you asking.
It matters more than usual because refinancing is a costly way out of PMI today. Freddie Mac's national average 30-year fixed rate was 7.11% for the week of November 12, 2026, down four weeks in a row but well above 6.24% a year earlier (Freddie Mac PMMS). Most people with PMI would rather keep their current rate and just drop the insurance.
When can I cancel PMI based on my original home value?
The federal Homeowners Protection Act sets three milestones for most conventional loans on a home you live in, according to the CFPB (CFPB):
- 80% by request. You can ask to cancel once your balance is scheduled to reach 80% of the original value. You can get there sooner with extra principal payments. You have to ask in writing, be current with a good payment history, certify there are no junior liens such as a second mortgage, and may need to show the home hasn't lost value.
- 78% automatically. PMI ends on its own on the date your balance is scheduled to hit 78% of the original value, if you're current.
- The midpoint. It must end the month after the midpoint of your loan term (15 years into a 30-year loan), even if you haven't hit 78%.
Can I use my home's current value instead?
On loans owned by Fannie Mae or Freddie Mac, often yes. This is where California owners who bought several years ago may have an opening. For a one-unit home you live in or a second home, Fannie Mae's Servicing Guide allows a borrower-requested cancellation based on current value when the balance is 75% or less of that value if the loan is two to five years old, or 80% or less if it's more than five years old (Fannie Mae Servicing Guide B-8.1-04). Freddie Mac uses the same thresholds for one-unit primary homes and second homes, per a mortgage insurer's side-by-side summary (Enact/Genworth flier).
Ways PMI can end on a Fannie Mae loan (one-unit home you live in)
| Balance must be at or below | You have to ask? | New valuation? | |
|---|---|---|---|
| Original value, by request | 80% of original value | Yes in writing | Servicer confirms value hasn't dropped |
| Original value, automatic | 78% of original value (scheduled) | No | No |
| Midpoint of the loan term | Any balance | No | No |
| Current value, loan 2 to 5 years old | 75% of current value | Yes | Yes interior and exterior inspection |
| Current value, loan over 5 years old | 80% of current value | Yes | Yes interior and exterior inspection |
The payment-history test is strict on every request: your loan must be current, with no payment 30 or more days late in the past 12 months and none 60 or more days late in the past 24. Fannie Mae also lets the two-year minimum be waived when the value went up because of improvements you made, in which case the 80% test applies.
What do those percentages mean in dollars?
Here's a hypothetical to show the math. It isn't anyone's actual loan. Say your balance today is $640,000. To qualify on current value, your home would need to appraise for:
Hypothetical: value needed to cancel PMI on a $640,000 balance
The quick way to check yourself: divide your current balance by a realistic value for your home. If the answer is under 0.75 (or 0.80 on an older loan), it's worth a call to your servicer.
A word of caution for recent buyers. California prices haven't only gone up. The California Association of Realtors reported the statewide median dipped from the second quarter to the third quarter of 2026, which I covered in this month's affordability piece. If you bought in 2024 or 2025, an appraisal may not show the gain you're hoping for, and you may pay for it either way.
How do I actually request it?
Requesting PMI cancellation based on current value
- 1
Step 1
Find out who owns your loan
- Ask your servicer whether Fannie Mae, Freddie Mac or another investor owns it
- Current-value rules differ by investor
- 2
Step 2
Ask your servicer for its PMI cancellation requirements
- Ask in writing
- Ask which valuation it will accept and what it costs
- 3
Step 3
Check your own numbers first
- Balance divided by realistic value
- Any late payments in the last 24 months?
- 4
Step 4
Order the valuation through the servicer
- Fannie Mae requires an interior and exterior inspection for current-value requests
- 5
Step 5
Watch for the decision
- Denials must come within 30 days with the reason and valuation results
- Approved: premium collection stops within 30 days
Under Fannie Mae's rules, once you qualify, the servicer must stop collecting premiums within 30 days, notify you within 30 days, and send any unearned premium refund within 45 days. If PMI is part of your escrow payment, expect a new payment amount after that, the same way escrow shortages change it in the other direction.
Thinking about a HELOC? Do this first
For a request under the Homeowners Protection Act, the CFPB says you have to certify there are no junior liens on the home. A HELOC or home equity loan is a junior lien, and it also raises your total debt against the house. If you're planning both, ask your servicer about PMI cancellation before you open a line of credit. I compare the two main ways to borrow against your home in HELOC vs. cash-out refinance.
I have an FHA loan. Does any of this apply?
Mostly no. FHA charges its own mortgage insurance premium (MIP), set by HUD, not PMI. For FHA loans with case numbers assigned on or after June 3, 2013, HUD's rule is that annual MIP lasts 11 years if you put down at least 10% (a loan-to-value of 90% or less), and for the full loan term if you put down less (HUD Mortgagee Letter 2013-04). Rising home values don't change that, and neither the Fannie Mae change nor the White House fact sheet mentions FHA.
For many FHA borrowers, the way out of MIP is refinancing into a conventional loan once there's enough equity, which means a new rate. With the national average above 7%, that only makes sense if the numbers work on your whole loan, not just the insurance line.
Derek\'s take
PMI is one of the few housing costs you can sometimes get rid of with a letter and an appraisal instead of a refinance. A lot of Californians who bought with less than 20% down a few years ago are still paying it because nobody told them to ask, and until September, Fannie Mae servicers weren't allowed to. Before you pay for an appraisal, run the simple math: balance divided by a realistic value. If you're close, or you're on an FHA loan and wondering whether a conventional refinance ever pencils out, I'm happy to look at it with you. Book a call with me whenever it suits you. Thirty minutes, no credit pull, no obligation.
Frequently asked questions
Can I remove PMI if my home value went up?
Often, if Fannie Mae or Freddie Mac owns your loan. For a one-unit home you live in, the balance must be 75% or less of the current value if the loan is two to five years old, or 80% or less if it's older than five years. You'll need a new valuation and a clean recent payment history.
Does PMI go away on its own?
Yes. Under the Homeowners Protection Act, it ends automatically when your balance is scheduled to reach 78% of the original value, or the month after the midpoint of your loan term, as long as you're current. Rising values don't trigger automatic removal today.
Who pays for the appraisal to cancel PMI?
Usually you do. Ask your servicer which valuation it requires and the cost before you order anything.
Will my servicer contact me if I qualify?
It may. Fannie Mae began allowing servicers to reach out in September 2026, and Freddie Mac already did, but it's permitted, not required. Don't wait for a call.
Can I cancel FHA mortgage insurance with a new appraisal?
No. For FHA loans with case numbers assigned on or after June 3, 2013, annual MIP lasts 11 years with at least 10% down, or for the life of the loan with less. Refinancing into a conventional loan is the usual way out.
This article is general education, not legal, tax or financial advice, and not an offer of credit or a commitment to lend. The dollar example is hypothetical. Mortgage insurance cancellation depends on your servicer, loan investor and property value.
Sources
- Consumer Financial Protection Bureau, When can I remove private mortgage insurance (PMI) from my loan?
- Fannie Mae Servicing Guide B-8.1-04, Termination of Conventional Mortgage Insurance
- Orrick InfoBytes, Fannie Mae announces servicers may proactively solicit borrowers for mortgage insurance termination (September 25, 2026)
- HousingWire, FHFA moves to align GSEs on PMI cancellation outreach (September 15, 2026)
- The White House, Fact Sheet: President Donald J. Trump Decreases Housing Costs for Americans (October 22, 2026)
- Enact (formerly Genworth), Fannie Mae and Freddie Mac borrower-paid MI cancellation summary
- HUD Mortgagee Letter 2013-04, FHA annual mortgage insurance premium changes
- Freddie Mac Primary Mortgage Market Survey (November 12, 2026)
This article is general education, not a commitment to lend, an offer of credit, or tax, legal or investment advice. All loans are subject to credit approval, income and asset verification, and property appraisal. Programs, rates, terms and limits change without notice; figures are current as of the publish date. Derek Shao, NMLS #242117, CA DRE #01358261. Financial Dynamics, Inc. DBA Emory Financial, Company NMLS #393986. Equal Housing Opportunity.
