Are You Still Paying PMI You Could Cancel?

If you put less than 20 percent down on a conventional loan, federal law says your servicer must cancel private mortgage insurance automatically when the balance is scheduled to hit 78 percent of the home's original value, and you can ask for it at 80 percent. What most owners miss is that a new appraisal showing today's value can get you there years earlier, and York County values have risen enough since 2021 that many borrowers already qualify.

PMI protects the lender, not you. You pay the premium; the lender gets the coverage. It is a line on your statement every month until one of three things happens: the scheduled balance reaches the threshold, you ask, or you refinance. Here is how each route works and a worked example using real York County appreciation.

When does PMI drop off automatically?

On the date your principal balance is first scheduled to reach 78 percent of the original value, as long as you are current. "Original value" means the lesser of the purchase price or the appraised value when you bought, and "scheduled" means the amortization schedule, not what you have actually paid. This comes from the Homeowners Protection Act (12 U.S.C. 4902). There is also a backstop: PMI must end the month after the midpoint of the amortization schedule (year 15 on a 30-year loan) if you are current, even if the balance is still above 78 percent.

How do I request cancellation at 80 percent?

Send a written request to your servicer once the balance is scheduled to fall to 80 percent of original value, or has actually reached it through extra payments. Under the Act and Fannie Mae's servicing rules the servicer will check four things:

• You are current, with no payment 30 or more days late in the last 12 months and none 60 or more days late in the last 24 months.
• You certify there is no second mortgage or HELOC on the property.
• The property's value has not fallen below its original value; the servicer may ask for evidence, such as an appraisal.
• The request is in writing.

Once the conditions are met, premiums must stop within 30 days and any unearned premium comes back to you within 45.

Can York County appreciation get me there sooner?

Yes, and this is the route most people never hear about. Fannie Mae allows cancellation based on current value, not original value, when a new valuation the servicer orders shows the loan-to-value ratio is 75 percent or less on a loan that is two to five years old, or 80 percent or less on a loan more than five years old. Improvements you paid for can also count, at 80 percent or less, with the two-year seasoning waived. Ask the servicer who pays for the broker price opinion or appraisal before you order it.

The reason this matters here: the FHFA house price index for York County rose from 199.74 in 2022 to 243.30 in 2025, a 21.8 percent gain, and RAYAC reports the county median sale price at $309,900 for January through August 2026, up 6 percent from the same period in 2025. A worked example:

Bought in 2022	Original value route	Current value route
Purchase price	$280,000	$280,000
Loan (5 percent down)	$266,000	$266,000
Value used	$280,000	$341,000 (up 21.8 percent)
80 percent / 75 percent target balance	$224,000 (80 percent)	$255,750 (75 percent)
Balance after four years (assuming 5.5 percent rate)	$250,400, not there yet	$250,400, qualifies

On the original value, that borrower would not reach 80 percent by scheduled payments until about year nine. With a valuation showing $341,000, the loan-to-value is 73 percent today and cancellation can be requested now. One phone call and the cost of an appraisal can end a premium you would otherwise pay for five more years.

What if I have an FHA loan?

FHA mortgage insurance (MIP) does not follow the 78 percent rule. For loans with FHA case numbers assigned on or after June 3, 2013, HUD collects the annual MIP for 11 years if the original loan-to-value was 90 percent or less, and for the full loan term if it was above 90 percent, which describes nearly every 3.5-percent-down FHA purchase. The way out of life-of-loan MIP is a refinance into a conventional loan once you have 20 percent equity, and with the appreciation above, a lot of 2020 to 2022 FHA buyers in York County are at or near that line.

Not sure what your house is worth today? That is my job. Send me the address and I will give you an honest number so you know whether the phone call to your servicer is worth making. Call or text me at 717-356-9413. This is general information, not legal or tax advice.