The number that decides this is 75. A conventional loan between two and five years old can shed private mortgage insurance once the balance falls to 75% of what the house is worth today, not what it sold for, and a loan past its fifth birthday needs only 80%. On September 15, 2026, FHFA Director Bill Pulte directed Fannie Mae to let servicers proactively telephone borrowers about precisely that, matching a permission Freddie Mac already granted, as HousingWire reported. The rule is not new. The phone call is.

Which makes waiting for it the expensive option. Fannie Mae's May 2026 servicing guidance prices a broker price opinion at $190 and a restricted appraisal on a one-unit property at $450; HousingWire cites $500 to $700 in typical markets. Against a PMI premium that commonly runs in the low hundreds a month, that is a payback measured in weeks. The homeowners for whom it does not pencil out are a narrow group, and they are identifiable in advance.

How the current-value test works

Federal law sets the floor. Under the Homeowners Protection Act, which covers loans closed on or after July 29, 1999, a borrower may request cancellation when the scheduled balance reaches 80% of the original value, and the servicer must terminate automatically at 78%, or the month after the loan passes the midpoint of its amortisation schedule, whichever comes first. The CFPB's summary is the plain-language version. Every threshold in it is anchored to the purchase price, which is why a house that has appreciated sharply can still be carrying insurance it no longer needs.

Fannie Mae and Freddie Mac are permitted to be more generous than the floor, and on this point they are. Their guides allow cancellation on a current valuation instead. For a one-unit principal residence or second home, Fannie Mae's Servicing Guide sets the bar at 75% LTV of current value for loans seasoned two to five years and 80% for loans past five years. Investment and two-to-four-unit properties are treated harshly: 70% at Fannie Mae, 65% at Freddie Mac. Below two years of seasoning there is no current-value path at all, unless the gain came from improvements the original borrower made.

Two further conditions apply and are not negotiable. The payment record must show no payment 30 or more days late in the past 12 months and none 60 or more days late in the past 24. And the valuation must satisfy the servicer: Fannie Mae wants a current appraisal, Freddie Mac will accept a broker price opinion or an appraisal.

The arithmetic, in three cases

A borrower paying $200 a month in PMI who buys a $450 restricted appraisal recovers the fee in a little over two months. Industry estimates of the break-even land in the same place from different starting points: HomeLight puts a $450 appraisal at about 2.5 months of payments, and one broker's arithmetic puts a $300 to $600 reappraisal at 1.5 to 3 months at the same premium.

The savings scale with distance from automatic termination, not with the size of the premium alone. A homeowner paying $300 a month who is six years from automatic termination avoids roughly $21,600, less the fee. A $600,000 loan carrying PMI at 0.40% a year, or $200 a month, would absorb $12,000 to $16,800 before amortisation alone brought it to 78% of original value five to seven years later.

The third case is the one worth naming. A borrower whose scheduled balance reaches 78% of original value in four months does not need a valuation, an argument or a request. Termination is automatic, mandatory and free, and an appraisal bought at that point is a donation to the appraiser. HomeLight makes this point more carefully than most of the sites that rank for the question, and it is the single check worth running before spending anything.

What the directive did not do

The alignment changes who may raise the subject. It does not change eligibility, seasoning, payment history or valuation requirements, and formal implementation guidance had not been posted when WRE News covered it on September 16, 2026. Servicers were told to keep following the existing guide until it is.

Automatic termination Current-value cancellation
Value used Original property value Today's appraised or BPO value
Trigger Scheduled balance hits 78%, or the amortisation midpoint Borrower requests it at 75% or 80% LTV, by seasoning tier
Who acts The servicer, without being asked The borrower, in writing
Cost to the borrower None $190 to $750 for a valuation, per Fannie Mae's May 2026 fee schedule
Seasoning needed None Two years, absent qualifying improvements

It is also not mortgage insurance in general. FHA and VA loans run on separate rules that the Homeowners Protection Act does not touch, so none of the thresholds above apply to them.

Beating the call

Pulte's framing of the old regime was that "you have to know to ask." Knowing to ask is still faster than waiting to be asked, and the sequence is short.

  • Divide the current balance by 0.75, or by 0.80 past the five-year mark

    That figure is the appraised value the house has to clear. A free online value estimate is enough to see whether the gap is plausible before any money changes hands.

  • Check the distance to automatic termination first

    If the scheduled balance is months from 78% of original value, or the loan is near its amortisation midpoint, the cheaper option is to do nothing.

  • Ask the servicer which form of valuation it will accept

    A broker price opinion at $190, or $75 to $150 in some markets, versus a full appraisal is the difference between a two-week payback and a two-month one. Fannie Mae loans generally require an appraisal; Freddie Mac loans may not.

  • Submit the request in writing, and certify no junior liens

    A second mortgage or HELUC-style subordinate lien defeats the request, as does a 30-day late in the past year.

  • Watch the clock after approval

    Charging must stop within 30 days of the evidence requirements being met, unearned premiums are returned within 45 days, and notice of cancellation is due within 30.

When the loan, not the insurance, is the problem

Cancellation removes a premium and leaves the note alone, which is the right outcome for most borrowers who qualify. It is the wrong one for a borrower whose rate is the real cost and whose equity now clears the thresholds anyway, because a refinance ends the insurance by ending the loan. That trade turns on closing costs against monthly saving, not on a $450 appraisal, and it is answered by comparing what lenders will actually quote.

Every homeowner who bought between 2021 and 2023 with less than 20% down is now inside the two-year seasoning window, and a good number of them are inside the 75% threshold without knowing it. The servicers may call. The arithmetic does not require them to.