How to Remove Mortgage Insurance From a Loan

Mortgage loans that allow less than the traditional 20 percent down make homeownership possible for many people who do not have a large savings. However, with less than 20 percent down, you will most likely have an insurance premium added to your monthly payment. This mortgage insurance covers the bank’s loss should you default on the loan. Once you establish yourself as a low-risk borrower, you can request that this mortgage insurance be removed from your loan.

Pay your mortgage on time every month. Although, by law, you have the option to request that your mortgage insurance be removed from the loan, if you are considered a high-risk borrower, your lender does not have to remove the insurance at this first request.

Pay your mortgage until you owe 80 percent or less of the home’s purchase price. This will be your first opportunity to request the insurance be canceled. For example, if you purchased your house for $100,000, then you must wait until you owe $80,000 or less to make the request. (By law, your mortgage provider must cancel your mortgage insurance once your balance falls to 78 percent.)

Hire an appraiser to estimate the value of your house if you still owe more than 80 percent of the home’s purchase price. If your home has gone up in value because of an increase in the housing market or home improvements, then the bank may consider the home’s increased value.

Contact your mortgage lender for information on canceling the mortgage insurance. Check your mortgage statement for the customer service phone number. The representative will give you instructions on how to request that the insurance be removed.


  • Loans insured by the FHA are not eligible to have mortgage insurance removed. In such cases, refinancing may be an option for removing the mortgage insurance.

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About the Author

Lynn Anders has more than 15 years of professional experience working as a zookeeper, wildlife/environmental/conservation educator and in nonprofit pet rescue. Writing since 2007, her work has appeared on various websites, covering pet-related, environmental, financial and parenting topics. Anders has a Bachelor of Arts in environmental studies and biology from California State University, Sacramento.