The 2 Rules That Decide When Mortgage Insurance Comes Off, and Why 78% Is Automatic

The equity is there and the charge continues

You put down less than 20% when you bought, so you pay private mortgage insurance every month. Your home is now worth far more and you owe far less.

You asked for the insurance to be removed. You were refused.

A request refused, and a valuation offered at your expense

1. You asked for the insurance to be dropped, citing what your home is now worth.
2. You were told the decision uses the original value, not today's.
3. You were offered two options: pay for a valuation, or pay the balance down further.
4. The valuation costs money and may not be accepted anyway.
5. Meanwhile the monthly charge continued.
6. Nobody mentioned the date it comes off automatically.

Why two rules exist, and only one needs no appraisal

There are two different rules and they are easy to confuse.

You can request removal once you owe 80% of the original value. That request can be refused, and the lender can insist on a valuation you pay for.

The insurance must be canceled automatically once your scheduled balance reaches 78% of the original value, on the date the original payment schedule says you get there. No request, no valuation, no fee.

The second rule is the one that matters and the one nobody mentions. It depends only on the payment schedule you were given at the start, so the date can be worked out on day one.

Rising house prices do not bring that date forward, which is the opposite of what most people assume.

The date is already in your original payment schedule

The original payment schedule. The date is computable from the loan amount, the rate and the term, and it has been knowable since the day you signed.

Where Plenee fits

This one is unusually clean, because it needs no estimate of what your home is worth.

• It can calculate the automatic cancellation date from the loan schedule alone, and

tell you the month it arrives.

• It can check the charge actually stops. The insurance line disappearing from your

payment is a visible event. It not disappearing is more visible still.

• It can tell you what it costs you meanwhile, as a monthly figure and a total, which

is what makes it worth chasing.

• It can flag the earlier request date too, so you can choose whether paying for a

valuation is worth it in your case.

Nobody sends a letter saying the charge is due to end. That is the whole opportunity.

Asking for the automatic termination date

• Ask for the automatic termination date in writing. They have it. It is based on your

original schedule.

• Check your statements after that date. Charges have been known to continue past it,

and a refund is owed if they did.

• Extra payments bring the date forward, because they move your balance down the

schedule faster. Ask them to recalculate.

• Know which rule you are invoking. A request based on today's market value is a

different conversation from a cancellation based on the original schedule.

Why so few people complain about this

Complaints specifically about mortgage insurance are rare — well under one in a hundred mortgage complaints.¹ Almost all of them describe the same thing: a removal request refused, and a valuation demanded at the borrower's expense.²