What is the 78% LTV rule?

Under the Homeowners Protection Act, servicers must automatically cancel PMI on the date the loan balance is scheduled to reach 78% of the home's original value, if the loan is current. It's measured against original value on the original amortization schedule — not current market value.

Is it 78% or 80% to remove PMI?

Both, for different things: 80% of original value is when you may request cancellation in writing; 78% is when the servicer must cancel automatically. There's also a third set — 75–80% of current value — for appreciation-based requests under GSE rules.

The 78% LTV Rule for PMI, Explained

Short answer: 78% is when the servicer must cancel PMI automatically (scheduled balance ÷ original value, loan current). 80% is when you may request cancellation against original value. 75–80% of current value is the appreciation path under Fannie/Freddie rules — 75% for loans 2–5 years old, 80% after 5 years. Most homeowners can act years before 78% arrives.

The three thresholds side by side

Threshold	Measured against	Mechanism	Source
80%	Original value	You request in writing; usually free	HPA §4902(a)
78%	Original value, scheduled balance	Servicer cancels automatically	HPA §4902(b)
75% / 80%	Current appraised value	You request; servicer orders valuation	Fannie B-8.1-04 / Freddie equivalent

What counts as "original value"?

The lesser of the purchase price or the appraised value at closing. If you refinanced, original value resets to the appraisal at the refinance. This matters: a 2021 refi at a higher appraisal may put your original-value LTV closer to 80% than you think.

Why "scheduled" balance is the trap in the 78% rule

The automatic date uses the balance your loan was projected to have, month by month, at closing. Prepayments don't accelerate the automatic date (they do help you reach the 80% request threshold sooner), and appreciation is invisible to it entirely. Waiting for 78% is the default outcome — and the most expensive of the three mechanisms in almost every case.

See which threshold you've already crossed — free →

Sources: 12 U.S.C. §4902 · Fannie Mae B-8.1-04 · FDIC HPA manual. Reviewed July 2026.