Stop sign icon Private Mortgage Insurance Can Be Cancelled

Mortgage insurance is great for helping you purchase your home, and with most mortgage insurance options, once you achieve a pre-determined equity level, your lender is required to cancel coverage—reducing your total monthly mortgage payment.1

Automatic Cancellation

Under the Federal Homeowners Protection Act of 1998, for loans originated after July 29, 1999, coverage on your primary residence must be cancelled once your balance is scheduled to drop to 78 percent of the original value of your property. Under this law, the cancellation occurs automatically—freeing up money that's sure to come in handy every month.2

Borrower-Requested Cancellation

You may be able to cancel coverage even earlier—when your loan balance reaches 80 percent of the original value. Rules for borrower-requested cancellation can vary by state and may involve other considerations. So, if you think you may be eligible to cancel mortgage insurance, check with your mortgage servicer (the company you send your mortgage payments to) for details, including requirements for submitting a written request.3

Consumer Guide to Canceling Private mortgage Insurance

A more detailed guide for canceling private mortgage insurance can be found here.

Note: This information is not intended to be comprehensive. Other restrictions, including state laws, may apply. The company that receives your mortgage payments (mortgage servicer) can provide the specifics related to eligibility.

1 Individuals who selected a borrower-paid single-premium product may be entitled to a refund of unearned premium rather than a mortgage payment reduction.

2 At the 78% level, automatic cancellation of mortgage insurance by the lender is not affected by past late payments or possible declines in property value. The rule simply states that the borrower must be current on mortgage payments—or become current—for cancellation to occur.

3 Contact your loan servicer to find out if United Guaranty provides the mortgage insurance for your home.