When Can You Cancel Private Mortgage Insurance?

 

If you made a down payment of less than 20% when you purchased your home, your lender likely required private mortgage insurance. This protects the lender against a loss in the event you are unable to make your payments as agreed and the lender has to foreclose. But how long do you need to pay for mortgage insurance? 

 

If you’ve been making monthly mortgage payments on time, you can request that mortgage insurance be canceled when your mortgage is paid down to 80% of the home’s original value – and if the property value has not declined. 

 

Your lender is obligated to automatically cancel mortgage insurance once your loan reaches 78% of the original value – without regard to market conditions. But again, provided that you are current with your payments. 

 

If you believe your home has increased in value, you may also be able to cancel mortgage insurance based on that increase. 

 

In any case, contact your lender in writing to request cancellation. You’ll likely be required to pay for an appraisal to prove the current value of your property. 

 

Other than the automatic termination required by law, cancellation always depends on market conditions and your payment history. Contact your lender if you have any questions.