How to Get Rid of PMI Fast (Even If You Just Bought Your House) 

You finally close on your dream home. You’ve survived bidding wars, inspection headaches, and enough paperwork to build a small fort. You sit down to make your first mortgage payment and then you see it: Private Mortgage Insurance (PMI). 

It’s that annoying little line item that adds an extra hundred (or few hundred) bucks a month to your bill. And for what? 

According to Consumer Finance Protection Bureau: Private mortgage insurance (PMI) is a type of mortgage insurance you might be required to buy if you take out a conventional loan with a down payment of less than 20 percent of the purchase price.

To protect your lender. Not you. 

So now you’re wondering the same thing every new homeowner eventually asks: How do I get rid of PMI? 

The good news is you can. And often, a lot sooner than your lender would like you to think. 

In this guide, I’ll break down every way to remove PMI fast. 
Whether you just bought your house last month or you’ve been paying for a few years, there’s a strategy that’ll fit your situation. 

Wait… Why Are You Paying PMI in the First Place? 

Let’s back up for a second, because most people don’t even know why they’re paying PMI to begin with. 

PMI stands for Private Mortgage Insurance, and it’s basically your lender’s way of saying, 

“We don’t trust you yet.” 

If you bought your home with less than 20% down, your lender sees you as a higher risk. So, they tack on PMI to cover themselves in case you default. 

Here’s the kicker: PMI doesn’t protect you, it protects them. 

If you’re not totally clear on what mortgage insurance actually is or why it exists, read my breakdown of What Is Mortgage Insurance and How You Can Get Rid of It Fast

And it’s not cheap either. On average, PMI costs anywhere from 0.5% to 1.5% of your loan amount per year. On a $400,000 loan, that’s anywhere from $2,000 to $6,000 every year gone. Just for existing. 

Now, there are a few different flavors of mortgage insurance depending on what type of loan you have: 

• Conventional loans: PMI is removable once you hit 20% equity. 

• FHA loans: You’re stuck with MIP (Mortgage Insurance Premium), which works differently (we’ll get to that later). 

The bottom line: PMI is the price you pay for not putting 20% down. But that doesn’t mean you’re stuck with it forever. 

Up next, I’ll show you the 3 fastest ways to get rid of PMI, ranked from easiest to hardest so you can finally stop paying your lender’s insurance bill and start building your own wealth instead. 

The 3 Fastest Ways to Get Rid of PMI (Ranked from Easiest to Hardest) 

When it comes to figuring out how to get rid of PMI, most homeowners fall into two camps. Some wait around for it to drop off automatically. Others take control and remove it early. If you are in the second group, good news you can speed things up. 

Here are the three fastest ways to remove PMI, ranked from easiest to hardest. 

1. Refinance Once You Hit 20% Equity 

Refinancing is one of the most common ways to get rid of PMI fast. When you refinance, you are replacing your old mortgage with a new one, ideally without private mortgage insurance attached. 

Fannie Mae requires at least 20% equity before a borrower can remove PMI on a conventional loan.

Here is how it works. If your home value has gone up or you have paid down your loan enough to reach 20% equity, a refinance can wipe out PMI completely. 

Let’s say you bought your house for $400,000 and owe $320,000. If your home is now worth $400,000 or more, you have hit 20% equity. That’s the magic number your lender needs to remove PMI. 

Before refinancing, use a home value estimator to check where your equity stands. If interest rates are lower than when you bought, refinancing can be a double win, you drop PMI and lower your monthly payment. 

If rates are higher, you might want to skip this method and move to the next one. 

2. Request PMI Cancellation Without Refinancing 

If you like your current mortgage rate, this is the route for you. Federal law (the Homeowners Protection Act) gives you the right to request PMI cancellation once your loan balance drops to 80% of your home’s original value. 

Here is what you will need: 

1. A solid payment history with no late payments in the past year. 

2. A current appraisal that proves your home is worth what you think it is. 

3. A written request to your lender asking them to remove PMI. 

Many homeowners do not realize this option exists. They just assume their lender will remove it automatically, which is not the case. 

Freddie Mac outlines the exact steps homeowners can take to cancel PMI early.

If your home’s value has jumped because of market growth or home improvements, an updated appraisal can get you there faster. That small upfront cost could save you thousands over the next few years. 

3. Wait for Automatic PMI Removal at 78% LTV 

This is the slowest method, but it is guaranteed to happen eventually. Once your loan balance reaches 78% of your home’s original purchase price, your lender is required by law to remove PMI automatically. 

According to the Consumer Financial Protection Bureau, lenders must automatically remove PMI once your loan reaches 78% of the home’s original value.

You do not have to make a request. You do not need an appraisal. It just happens. 

The downside? It can take years to reach that point if you only make the minimum monthly payment. On a 30-year loan, you could be paying PMI for close to a decade before it disappears. 

If you want to speed things up, send in a few extra principal payments each year. That alone can shave months or even years off your PMI timeline. 

Most homeowners stick with option three without realizing they have better choices. But if you are serious about learning how to get rid of PMI fast, start tracking your equity today. The moment you hit that 20% threshold, take action. 

Up next, we will go over how to build equity faster, even if you just bought your house

How to Build Home Equity Faster (Even If You Just Bought Your House)

So maybe you just bought your house, and your lender told you that you’ll be paying PMI for years. You nodded politely but deep down you were thinking, “There’s got to be a faster way.” 

There is. 

If you want to know how to get rid of PMI before the slow, automatic route kicks in, you have to build equity faster. And no, it’s not as complicated as it sounds. It comes down to increasing your home’s value or decreasing what you owe. Do both, and PMI doesn’t stand a chance. 

Here are four ways to make that happen. 

1. Make One Extra Principal Payment per Year

This is the easiest strategy that most people ignore. One extra principal payment a year can speed up your loan payoff and help you hit 20% equity much sooner. 

If you get a work bonus, tax refund, or even a few hundred bucks sitting in savings, throw it toward your principal. It’s like taking a shortcut on your mortgage. 

A $400,000 loan at 6% can lose PMI roughly a year or two earlier just by doing this. That could save you thousands in unnecessary insurance costs. 

2. Order a New Appraisal if Your Home Value Has Jumped 

Your lender uses your home’s loan-to-value ratio (LTV) to determine whether PMI can be removed. The lower your LTV, the closer you are to freedom. 

If property values in your area have gone up, you might already be sitting on 20% equity without realizing it. All you need is an updated appraisal to prove it. 

This method works especially well if you bought your home during a hot market and values have continued to climb. 

3. Focus on Home Improvements That Actually Add Value 

Not all upgrades are created equal. Some make your home look better to you, but others actually improve your appraisal value. Focus on the second kind. 

Kitchens and bathrooms almost always bring the best return. Curb appeal upgrades, like landscaping or a new front door, also move the needle. 

Just remember, your man cave lighting or themed game room might look cool on Instagram, but the appraiser won’t care. 

The goal is to make your house more valuable on paper so your loan-to-value ratio drops—and that gets you one step closer to removing PMI. 

4. Avoid Taking Out a Home Equity Loan Too Soon 

It might be tempting to use your growing equity for a home equity loan or HELOC, but doing that too early can actually push your LTV in the wrong direction. That means PMI stays longer. 

If your goal is to get rid of PMI fast, hold off on borrowing against your house until after it’s gone. Then, once you are in the clear, you can use your equity strategically—like investing, paying down high-interest debt, or funding renovations that truly boost value. 

Building equity is the hidden key to getting rid of PMI fast. You do not have to wait five or ten years for your lender to do it for you. With a few smart moves and some awareness of your home’s value, you can take control of your timeline. 

Next up, let’s talk about what happens if you have an FHA loan—because that is a whole different story. 

What If You Have an FHA Loan? (PMI’s Evil Twin: MIP) 

If you have an FHA loan, your situation is a little different. Technically, you don’t have PMI—you have something called MIP, which stands for Mortgage Insurance Premium. Same idea, different rules. 

Nerd Wallet explains how FHA loans include both an upfront and annual mortgage insurance premium (MIP).

Think of MIP as PMI’s stubborn cousin who just refuses to leave the party. 

Here’s how it works. 
When you get an FHA loan, you pay two types of mortgage insurance: 

1. An upfront MIP, usually 1.75% of your loan amount (this gets rolled into your loan). 

2. An annual MIP, broken up into monthly payments that you’ll see right there on your mortgage statement. 

Here’s the frustrating part. 
If you put less than 10% down, that monthly MIP stays for the entire life of the loan. That means unless you refinance out of your FHA loan, you’ll never get rid of it. 

If you put 10% or more down, MIP sticks around for 11 years before it falls off automatically. 

So how do you actually get rid of it faster? 
You guessed it—refinance into a conventional loan once your credit score and equity are in a good place. 

That one move can save you hundreds of dollars a month and remove MIP entirely. 

Before you refinance, make sure: 

• You have at least 20% equity in your home. 

• Your credit score has improved since you bought the house. 

• Current interest rates are reasonable. 

If you check those boxes, a conventional refinance is usually your fastest escape route from FHA MIP. 

If you have an FHA loan and you want to know how to get rid of PMI or MIP, refinancing is almost always the only real solution. Once you do, you’ll join the lucky crowd of homeowners who get to stop paying extra for someone else’s protection policy. 

Next up, we’ll talk about when refinancing actually makes sense and when it doesn’t. 

Should You Refinance Just to Remove PMI? 

Refinancing sounds like the magic button for everything, right? Lower rates, no PMI, new loan terms, maybe even some cash out if you need it. But before you jump in, let’s look at whether it actually makes sense to refinance just to get rid of PMI. 

The short answer? It depends on your numbers. 

Refinancing can be the fastest way to get rid of PMI but not if it costs you more in the long run. 

Here’s what you need to weigh. 

When Refinancing Makes Sense 

• You’ve built at least 20% equity. 
  That’s the golden rule. If your home value has gone up or you’ve paid down enough of your balance, a refinance can remove PMI completely. 

• Interest rates are lower than when you bought. 
  You’ll save money two ways—by cutting your rate and dropping PMI. That combo can make a big difference in your monthly payment. 

• You plan to stay in the home for several years. 
  Refinancing has closing costs. You’ll need time to break even before you actually see the savings. 

👉 Read next: Should I Refinance My Mortgage? 7 Signs It’s Finally Worth It (or Not) a deep dive into when refinancing truly pays off versus when it’s better to wait.

Here’s a quick example. 
Let’s say your PMI is $250 a month, and refinancing costs you $4,000 in fees. 
You’d break even in 16 months. If you plan to stay longer than that, it’s worth doing. 

When Refinancing Doesn’t Make Sense 

• Interest rates are higher now than when you bought. 
  You might remove PMI, but if your new rate is higher, you could wipe out your savings completely. 

• You’re planning to sell soon. 
  If you plan to move in the next year or two, it’s usually better to ride out the PMI until you sell. 

• Your credit score dropped. 
  A lower score means worse loan terms, and that can offset the benefits of removing PMI. 

A Better Option for Some Homeowners 

If you’re not sure refinancing makes financial sense, consider requesting PMI cancellation instead. That keeps your current loan in place but lets you remove the insurance if your equity is high enough. 

Sometimes, a quick appraisal and a phone call to your lender is all it takes. 

Refinancing can absolutely be one of the smartest ways to get rid of PMI—but only if the math checks out. The goal isn’t just to drop insurance. It’s to actually save money. 

Next, let’s talk about what those savings really look like once PMI is gone.

How Much You’ll Actually Save Once PMI Is Gone 

You can estimate your current PMI cost using this Mortgage Calculator.

By now you probably know PMI is money down the drain. But how much are you really losing every month? And how much can you actually save once it’s gone? 

Let’s break it down. 

The Real Cost of PMI 

PMI usually costs between 0.5% and 1.5% of your loan amount per year. That might not sound like much until you do the math. 

If your loan is $400,000, here’s what it looks like: 

• At 0.5%, that’s $2,000 a year. 

• At 1%, that’s $4,000 a year. 

• At 1.5%, that’s $6,000 a year. 

That’s money you never see again. It doesn’t build equity. It doesn’t protect your home. It just makes your lender feel better about giving you the loan. 

The Savings When PMI Is Gone 

When you figure out how to get rid of PMI, your monthly payment drops instantly. 

For most homeowners, that means saving anywhere from $150 to $400 a month. Over a single year, that’s easily $1,800 to $4,800 back in your pocket. 

Now imagine what you could do with that: 

• Throw it toward your principal and pay off your house faster. 

• Build an emergency fund. 

• Invest it. 

• Or, let’s be honest, finally take that weekend trip you keep putting off. 

Once PMI is gone, that money is yours to reallocate. And the earlier you remove it, the more you save. 

Quick Tip 

Before you celebrate, check your new payment breakdown. Some lenders take a month or two to remove PMI after approval. Keep an eye on your mortgage statement to make sure it actually disappears. 

Getting rid of PMI isn’t just about cutting an annoying fee. It’s about freeing up money that actually moves you closer to financial independence. 

Next, let’s go over a few common mistakes people make when trying to remove PMI—so you can avoid falling into the same traps. 

Common Mistakes Homeowners Make When Trying to Remove PMI 

So you’ve done the work. You’ve built up equity, maybe even paid for a new appraisal, and now you’re ready to tell your lender goodbye to PMI. But before you make your move, let’s cover a few common mistakes that can slow things down or cost you more money. 

1. Waiting for PMI to Remove Itself 

This one’s a classic. Most people think PMI disappears automatically once they hit 20% equity. It doesn’t. By law, lenders only have to remove it automatically at 78% loan-to-value not 80%. 

That means if you sit back and wait, you’re literally paying extra for no reason. Always request PMI removal once you reach 80%. Don’t give your lender free money. 

2. Not Keeping Track of Your Home Value 

Your lender bases PMI removal on your home’s value, and if the market has gone up, you might already have enough equity to qualify. But if you never check, you’ll never know. 

Get in the habit of checking your estimated home value at least once a year. Tools like Zillow or Redfin aren’t perfect, but they’ll give you a ballpark number. If you suspect your home has jumped in value, order an appraisal. That’s often the golden ticket to remove PMI fast. 

3. Forgetting to Ask in Writing 

Verbal requests don’t count. Most lenders require a written letter or email to start the PMI removal process. If you only call and ask, it might get “lost” in the system. 

Keep it simple. Just say you’re requesting PMI removal under the Homeowners Protection Act and include your loan number, address, and contact info. 

4. Missing or Late Payments 

Lenders will not remove PMI if you’ve had any late payments in the last 12 months. Even one 30-day late mark can reset the clock. 

If you know you’re getting close to 80% equity, make sure your payment history is spotless. That’s an easy box to check before submitting your request. 

5. Ignoring the Power of a Simple Refinance 

Some homeowners cling to their current mortgage terms out of fear of change. But sometimes a quick refinance can save you thousands by removing PMI and lowering your interest rate. 

If you’ve improved your credit score or the market has dropped rates since you bought, it’s worth checking. Don’t assume you’re stuck. 

Avoiding these mistakes can make the PMI removal process smoother, faster, and way less stressful. You’ve already done the hard part by buying the house—now make sure you’re not overpaying for it. 

Next, let’s wrap everything up with the biggest takeaways from this guide and how to stay on top of your mortgage from here. 

Key Takeaways

You can also review other lender options for removing PMI through resources like Rocket Mortgage.

Getting rid of PMI isn’t just about saving a few bucks each month. It’s about taking control of your mortgage instead of letting your lender call the shots. 

Here’s what to remember: 

• You can remove PMI faster than you think. Don’t wait for your lender to do it automatically. 

• Track your home equity. As soon as you hit 20%, request PMI removal in writing. 

• An appraisal can be your shortcut. If your home value went up, that new number could qualify you instantly. 

• Refinancing works best when rates are in your favor. Run the numbers before jumping in. 

• Never miss payments. A clean history keeps your options open. 

The bottom line: PMI is temporary. You don’t have to live with it for the next decade. Learn the rules, track your equity, and make your move when the time is right.