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PMI Cancellation Calculator80% and 78% LTV under the Homeowners Protection Act

What do these figures come to once the work is shown?

Month the balance first reaches 80 percent and 78 percent of original value on the scheduled amortization, the midpoint backstop and PMI paid until then.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Month the scheduled balance reaches 80% (you may request cancellation)
95.00
Payment number on the original amortization schedule
Month the scheduled balance reaches 78% (automatic termination)
109.00
Midpoint of the amortization period (final termination)
180.00
Drawn to one scale
Mortgage insurance paid through 80%$17,100
Mortgage insurance paid until automatic or final termination, whichever is first$19,620
All results
MeasureResult
Month the scheduled balance reaches 80% (you may request cancellation)95.00
Month the scheduled balance reaches 78% (automatic termination)109.00
Midpoint of the amortization period (final termination)180.00
Starting loan-to-value90.00%
Mortgage insurance paid through 80%$17,100
Mortgage insurance paid until automatic or final termination, whichever is first$19,620
How this was worked out
Work shownrecomputed as you type
Balance after k payments = L x (1 + r)^k - P x ((1 + r)^k - 1) / r
Cancellation request: first k with balance <= 80% of original value
Automatic termination: first k with balance <= 78% of original value

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Balance after k payments = L x (1 + r)^k - P x ((1 + r)^k - 1) / r
  • Cancellation request: first k with balance <= 80% of original value
  • Automatic termination: first k with balance <= 78% of original value

How it works

The Homeowners Protection Act sets two dates for private mortgage insurance on a fixed-rate home loan. A borrower may ask to cancel once the principal balance is first scheduled to reach 80 percent of the original value of the property, or actually reaches 80 percent from payments. The insurance ends automatically when the balance is scheduled to reach 78 percent, if the borrower is current.

There is also a backstop: if neither date has ended it, the requirement cannot continue past the first day of the month after the midpoint of the amortization period. Cancellation on request also needs a good payment history and the lender may require proof that value has not declined and no junior lien. Original value is the lesser of the contract price and the appraised value at closing for a purchase; the Act covers single-family primary residences with loans closed after July 29, 1999. Check your loan papers.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Can I cancel earlier by paying extra?

Yes. Based on actual payments the balance can reach 80 percent sooner, and you may request cancellation then.

What if I am late on payments?

Automatic termination waits until you are current, and a request needs a good payment history.

Does appreciation count?

The statute measures against the original value of the property, so appreciation does not move these dates.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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