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Quick answer — when can you drop PMI?
Equity % = (home value − loan balance) ÷ home value × 100. Demo: $400,000 value, $320,000 balance → 20% equity — conventional PMI removal threshold met (≈20%). PMI ≈ $150/mo ($1,800/yr savings if removed). FHA/USDA usually require refinance, not cancellation on the same loan.
Free PMI removal calculator for conventional, FHA, USDA, and VA loans — equity %, payoff gap, and savings. More tools on our Finance & Housing hub.
Last updated October 9, 2026
Need LTV?Loan-to-value calculator
Equity
20%
$80,000 · LTV 80%
Status
ELIGIBLE
At 20.0% equity you meet the 20% threshold to request PMI cancellation (verify lender rules and appraisal).
Estimated PMI today
$150/mo
Monthly savings
$150
Annual savings
$1,800
Lenders may require appraisal, good payment history, and written request. FHA/USDA usually need a refinance to drop mortgage insurance — not the same as conventional PMI cancellation.
| Scenario | Equity | PMI/mo | Savings/mo | Extra equity | Conv. eligible |
|---|---|---|---|---|---|
| Default — $400k home, $320k balance, 20% equity | 20.0% | $150 | $150 | — | Yes |
| Below threshold — $400k home, $328k balance (~18% equity) | 18.0% | $150 | $0 | $8,000 | No |
| Strong equity — $450k value, $340k balance (~24%) | 24.4% | $180 | $180 | — | Yes |
| Fair payment history — 22% threshold, $400k / $312k balance | 22.0% | $150 | $150 | — | Yes |
| FHA — $350k value, $310k balance (refi planning) | 11.4% | $152 | $0 | $30,000 | Refi |
| Loan | Threshold | Notes |
|---|---|---|
| Conventional | 20% equity (request) / 22% (auto on schedule) | Borrower-paid PMI can be removed when equity and payment history meet lender and federal rules. |
| FHA | Refinance — not cancelable like PMI on most FHA loans | FHA mortgage insurance (MIP) usually requires refinancing to conventional once you have enough equity. |
| USDA | Refinance to drop guarantee fee / MI | Similar planning: build equity, then refinance if it saves money after closing costs. |
| VA | N/A | No monthly PMI — funding fee is separate from PMI removal. |
Equity
20%
PMI / mo
$150
Annual savings
$1,800
1. Current equity ($)
Home value − loan balance
2. Equity percent
(Equity ÷ home value) × 100
3. Conventional request
Often 20% equity with good payment history (lender may require appraisal)
4. Conventional automatic
22% equity on original amortization schedule (Homeowners Protection Act baseline)
5. PMI cost
Annual PMI ≈ original loan × PMI rate %; monthly ÷ 12
Equity: $110,000 → 24.44% — eligible for conventional PMI removal in this model.
PMI: $360,000 × 0.6% ÷ 12 ≈ $180/month ($2,160/year).
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