“Do I need mortgage insurance?” is two products sharing a nickname. Private mortgage insurance (PMI) protects the conventional lender when you put less than about 20 percent down. FHA mortgage insurance (upfront + annual MIP) is a government program with its own cancel rules. VA loans use a funding fee, not PMI. CFPB: if the lender is paying the MI, different rules apply.
This is not a quote and not advice from a licensed lender. Ending PMI lowers the monthly bill. It does not make the house cheaper to buy on day one.
Short answer: do I need mortgage insurance?
On a conventional purchase or refinance above 80 percent LTV, you usually pay borrower-paid PMI until equity or the Homeowners Protection Act says stop. CFPB (Ask CFPB, last reviewed August 28, 2023; page modified June 30, 2025): for many single-family principal-residence mortgages closed on or after July 29, 1999, you may request cancellation when the principal is scheduled to hit 80 percent of original value. The servicer must automatically terminate PMI when the scheduled balance hits 78 percent, if you are current. There is also a midpoint backstop: PMI ends the month after you reach halfway through the original amortization (15 years on a 30-year), even if 78 percent has not arrived - again, if you are current.
“Original value” is generally the lower of purchase price or purchase appraisal. After a refinance, CFPB: original value is the refinance appraisal.
CFPB owning-a-home (February 18, 2026): less than 20 percent down likely means mortgage insurance and a lower target price. That is the affordability link: how much house can I afford.
FHA and VA do not use this 80/78 PMI script. CFPB: ask the servicer. FHA MIP on high-LTV loans often lasts for the life of the loan unless you refinance into conventional. Do not assume HPA cancels FHA.
| Cover | When it shows up | How it usually ends |
|---|---|---|
| Conventional PMI (borrower-paid) | LTV above ~80% | Request at 80% original value; auto at 78%; midpoint of term (CFPB/HPA) |
| Lender-paid MI | Built into a higher rate | Generally not cancellable the HPA way (CFPB) |
| FHA MIP | FHA loans | Different HUD rules; often refinance to drop it |
| VA | Funding fee, not PMI | Not an HPA PMI product |
Illustration only - not a rate card: 0.5 percent a year on a $320,000 loan is $133.33 a month. Actual PMI is priced off score and LTV by the MI company, not by this blog.
A $320,000 loan at a 0.5% toy PMI rate is about $133.33 a month. At $240,000 / $300,000 you are at 80% LTV (ask to cancel). At $234,000 / $300,000 you are at 78% (auto-terminate if the loan is current).
Featured-snippet definition
Mortgage insurance on a conventional loan is PMI, usually required when you borrow more than 80 percent of the home’s value. Under the Homeowners Protection Act, you can often ask to cancel at 80 percent of original value, and servicers must drop it at 78 percent if you are current. FHA and VA use different products.
Diagnose whether you can drop it this year
- Find the PMI disclosure from closing. CFPB: the first date you may request cancel is on that form.
- Confirm original value (purchase vs refinance appraisal). A hot market does not automatically recompute HPA off the new Zillow number. Some servicers have investor guidelines that allow earlier cancel with a new appraisal; those cannot be worse than HPA (CFPB).
- Be current, have a good payment history, and be able to certify no junior liens (a HELOC can block cancel). See what is a home equity loan.
- If the loan is FHA, call the servicer. Do not send an HPA 80 percent letter and expect MIP to die.
- A rate-and-term refinance into ≤80 percent conventional LTV is another path (NerdWallet). Price closing costs: should I refinance my mortgage.
FAQ
Is PMI the same as homeowners insurance?
No. PMI protects the lender. Homeowners insurance protects the house (and usually you). Lenders require both for different reasons. How much is homeowners insurance.
Does 20 percent down always skip PMI?
On a standard conventional first lien, yes, at origination. Piggyback seconds, high-balance quirks, and lender overlays exist. Read the Loan Estimate line for MI.
What if I am not current at 78 percent?
CFPB: automatic termination waits until shortly after you bring the loan current.
Sources
- CFPB, When can I remove PMI?
- CFPB, Figure out how much you want to spend
- NerdWallet, Rate and term refinance
- 12 U.S.C. §4902
Conclusion
Do you need mortgage insurance? If the conventional LTV is over 80 percent, yes - until HPA or the MI certificate says otherwise. CFPB’s 80 / 78 / midpoint clocks are the consumer rights on borrower-paid PMI for covered loans. FHA MIP is not that clock. Keep the disclosure, stay current, and send the share links under this article, not a Facebook post that treated a Zestimate as original value.