Mortgage insurance is there as long as it’s needed. The Homeowner’s Protection Act (HPA) is a law designed to protect those who buy homes using borrower-paid MI. It allows MI to be cancelled under certain circumstances and ensures that lenders notify borrowers of their right to cancel coverage when specific requirements have been met.

MI can usually be cancelled when the loan reaches an 80% loan-to-value (LTV) ratio.
Here are some examples of how that would happen:

• The loan balance has been paid down to an 80% LTV based on the original appraised value.
  
  
• Structural improvements have been made that will increase the value of the home.¹
  
  
• Homes in the neighborhood have appreciated significantly in value, as shown by a new appraisal after a minimum two-year period.

Statistics show that 90% of borrowers cancel their MI within 60 months.

¹ Most investors have a required two-year minimum of paying mortgage insurance before a new appraisal can be ordered.