# How to Calculate Equity to Remove PMI

Compare your current home value to the home’s value at the time you took out the mortgage. The equity needed to cancel PMI is the smaller of the two values. Your lender may require an appraisal to verify that your home has not decreased in value.

Multiply the smaller of the current home value or the value when you took out the mortgage by 20 percent to figure the equity needed to request the cancellation of PMI. For example, say the home was worth \$230,000 and it hasn't declined in value. Multiply \$230,000 by 0.2 to find you need at least \$46,000 in equity to cancel PMI.

Subtract the amount of equity needed from the value to find the point to which you need to pay down your mortgage to cancel PMI. In this example, subtract \$46,000 from \$230,000 to find you need to pay down your mortgage to less than \$184,000 before you can terminate PMI.

#### Warning

• If your loan is classified as one with high risk, you may have to attain a higher percentage of equity before you can stop paying PMI.