Here is how to explain PMI removal to a borrower: give her the month it comes off, straight from her amortization schedule. On a conventional loan she can ask to cancel once the balance is scheduled to reach 80% of the original value. It ends on its own at 78% if she stays current. Mortgage Maker shows that schedule with one toggle.
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The call that starts it
It is Thursday at 6:20 in the evening and a first-time buyer calls from a grocery store parking lot. Her Loan Estimate is open on her phone, thumb on the Mortgage Insurance line on page 1. She asks one thing: “When does that go away?”
Most of us answer with the rule: “When you hit 20% equity.” That sentence is true, and I think it is the most misleading true sentence in this business. She hears two or three years. On a 30-year loan the scheduled date is usually much further out, because the early payments go mostly to interest.
When does PMI come off a conventional loan?
Federal law sets the floor. The CFPB’s page on removing PMI, last reviewed August 28, 2026, covers loans on a principal residence closed on or after July 29, 1999. PMI comes off on one of three scheduled dates, or sooner by two faster paths.
| Path | Trigger | Where to find the month |
|---|---|---|
| Borrower asks, on schedule | Balance scheduled to reach 80% of original value | First row at or below 80% on her amortization schedule |
| Automatic | Balance scheduled to reach 78% of original value | First row at or below 78%, if she is current |
| Borrower asks early | Actual balance reaches 80% through extra principal | Rerun the schedule with the extra principal |
| Midpoint backstop | Halfway through the loan term | The first month after the halfway point |
| Fannie Mae, current value | 75% loan-to-value after 2 years, 80% after 5 | A new valuation ordered by the servicer |
Original value is the lower of the contract price or the purchase appraisal. Her request must be in writing, with payments current and a clean history, no junior liens, and a value no lower than the original.
Two faster paths, and what each costs her
Extra principal is the first. The CFPB lets her ask once the actual balance reaches 80%, so every extra dollar toward principal pulls the request date closer. Every month without mortgage insurance is money she keeps.
The catch is cash. A first-time buyer who just emptied her savings to close should rebuild a cushion first. I would tell her to wait six months, then start the extra principal. Some buyers never start. Fine.
Appreciation is the second path. For a loan Fannie Mae owns, Servicing Guide section B-8.1-04 (checked October 30, 2026) allows removal on current value after two years: 75% loan-to-value through year five, 80% after that. The servicer orders the valuation, with an interior and exterior inspection. She also needs no 30-day late payment in 12 months and no 60-day late in 24.
Reaching 75% in two years takes real appreciation, and I would never promise it. The five-year test at 80% is usually the realistic one.
How to explain PMI removal to a borrower in one text
Put it in a text she can save. Mine reads like this, with her dates from the schedule swapped in:
“Your PMI can come off in [month and year] if you ask in writing and pay on time. Extra principal, once your savings are rebuilt, can move that date sooner, and I will show you how much. It stops on its own in [month and year] if you stay current. If your home’s value climbs, you may be able to drop it after two years, and I will help you check.”
That text earns more trust than a closing gift. J.D. Power’s 2025 origination study (November 12, 2025) found customers who gave top scores for useful guidance were 2.3 times more likely to say they “definitely will” use their lender again.
How do I find the PMI removal month in Mortgage Maker?
- Find the original value. Take the lower of price and appraisal, then multiply by 0.80 and 0.78.
- Open the amortization schedule. In Mortgage Maker it is one toggle in the report.
- Find the two rows. Note the calendar month where the balance first drops below each number.
- Run one extra principal case. Rerun the balance with her planned extra principal.
- Send the text. Two dates, saved on her phone.
None of this applies to FHA or VA loans; the CFPB sends those borrowers to their servicer. Lender-paid mortgage insurance follows different rules too, so check the loan type first. On an adjustable loan, I rerun the schedule after each reset.
FAQ
When can a borrower ask to remove PMI on a conventional loan?
Borrowers on a conventional loan can ask in writing once the balance is scheduled to reach 80% of the original value, or reaches it early through extra principal. Per the CFPB, payments must be current, with a good history, no junior liens and no drop in value. Mortgage Maker’s amortization schedule shows the month.
When does PMI come off automatically?
PMI ends automatically when the balance is scheduled to reach 78% of the original value, as long as payments are current. If payments are current, a midpoint rule ends it the month after the halfway point. The month comes from the loan’s amortization schedule, which Mortgage Maker shows with one toggle.
Can a higher home value get PMI removed sooner?
Yes, on a loan Fannie Mae owns. Servicing Guide section B-8.1-04 allows removal on current value after 2 years at 75% loan-to-value, or after 5 years at 80%, with no 30-day late payment in the past 12 months. A Mortgage Maker report shows the original schedule for comparison.
How do I find the PMI removal month on a Mortgage Maker amortization schedule?
Turn on the amortization schedule in the Mortgage Maker report, which takes one toggle, then find the payment where the balance first drops below 80% of the original value. Send that month and the 78% month to the borrower in writing. Mortgage Maker is $99 a month.
Send the date before she asks
Pull your last five conventional purchases with less than 20% down, find each 80% month, and text it this week. Building each report in Mortgage Maker takes a few minutes. See how it compares in the best mortgage presentation software for 2026. Start a 14-day free trial or book a live demo.
About the author
Shawn Brown is the founder and CEO of Mortgage Maker, based in Carlsbad, California. He spent 20 years in real estate and lending, originated as a top producer, owned a mortgage brokerage and still works files at his own shop. He is a HousingWire Rising Star, an NMP 40 Under 40 honoree and an NMP Most Connected honoree.
Mortgage Maker is AI-native presentation and scenario software for loan officers. Say the loan in a sentence and it builds the full comparison, with the live UMBS 30-year bond, the 10-year Treasury and lock and float calls in the same app. One plan, $99 a month or $950 a year, rated 5.0 on G2 and Capterra. See the features, the pricing and how Mortgage Maker compares.
