Private Mortgage Insurance in Minnesota: What PMI Is and When It Ends

Private mortgage insurance is insurance you may be required to carry on a conventional loan when your down payment is less than 20 percent of the purchase price. It protects your lender, not you. And it is not permanent. Federal rules set two points at which it comes off, one you have to ask for and one that happens on its own, and both are measured against the original value of your home rather than against what the home is worth today.

That last sentence is the one most buyers have never been told, and it is the reason this article exists.

Two notes before we go further. You will not find a PMI cost figure or a premium percentage here. What a premium looks like is specific to a loan, and the useful version of that number comes from looking at an actual file rather than from an article. And this is general education about how mortgage insurance works, not advice about your loan. PMI rules and options vary by loan and by servicer, so confirm the details of your own situation.

What private mortgage insurance is, and when it applies

PMI is an insurance policy attached to your mortgage. On a conventional loan, it might be required when your down payment is less than 20 percent of the purchase price.

The word to notice there is might. The Consumer Financial Protection Bureau states the requirement that way for a reason, and so does this article. Whether mortgage insurance applies to a particular loan is a loan-level answer, not a rule you can apply to yourself from the outside.

The requirement usually carries over to a refinance as well. If you refinance a conventional loan and your equity is less than 20 percent of the value of the home, mortgage insurance generally comes with it.

For a buyer shopping in Lakeville, Burnsville, Eagan, or anywhere else in the South Metro without 20 percent saved, this is a line worth asking about early rather than being surprised by at the closing table.

Does PMI protect the borrower? No, and this is the part people get wrong

This is the single most common misunderstanding about mortgage insurance, so it belongs early and it deserves a flat statement.

PMI protects the lender, not you, if you stop making payments.

You pay the premium. The coverage belongs to the lender. It is not homeowners insurance, which covers the house itself, and it is not a policy that makes your mortgage payment for you if your income changes.

That is not a reason to resent it. It is the coverage that sits behind a conventional loan made with less than 20 percent down, which describes a great many first-time buyers in the Twin Cities. But knowing who it protects changes how you think about it. It is a cost that comes with a smaller down payment, and it is a cost worth ending as soon as the rules allow.

How the PMI premium can be paid

There are three structures. Which one applies is a detail of your particular loan.

1.       Monthly, added to your mortgage payment.

2.       Once, as a one-time up-front premium paid at closing.

3.       Both, an up-front premium and a monthly premium together.

That is the whole list. The monthly version is the one most people picture, and it is why mortgage insurance is usually described as riding inside the payment rather than arriving as a separate bill.

If you want to sketch out what a payment looks like while you are still shopping, you can run your own scenarios on the MinnTrust mortgage calculator (https://www.chadkruegerlending.com/calculator).

How to remove PMI by requesting cancellation at 80 percent

Federal rules give you the right to ask, and give your servicer an obligation to say yes when four conditions are met.

You can request cancellation when your principal balance is scheduled to fall to 80 percent of the original value of your home. Two words in that sentence are doing all the work. Scheduled means the date your amortization schedule says the balance reaches that point. Original value means the value the loan was based on at the beginning.

Your servicer is legally required to honor the request when all four of these are true:

4.       The request is in writing.

5.       You have a good payment history and you are current on your payments.

6.       You certify that there are no junior liens on the home, such as a second mortgage.

7.       The value of the property has not declined below its original value.

Two practical points follow from that. The first is that the request is yours to make. Nothing about this step happens on its own. The second is that the payment-history condition is a real condition rather than a formality. If you are behind when the date arrives, the four conditions are not met, and the obligation to grant the request does not apply.

When does PMI automatically cancel?

This one you do not have to ask for.

On the date your principal balance is scheduled to reach 78 percent of the original value of the home, your servicer must terminate PMI automatically, provided you are current on your payments.

Notice the same two anchors again. Scheduled, and original value. The date comes off the amortization schedule the loan started with.

So there are two numbers and the difference between them is simply who acts. At 80 percent, you ask. At 78 percent, it ends on its own. A borrower who never asks will still see mortgage insurance end, just later than it could have ended.

The midpoint backstop almost nobody knows about

There is a third rule, and it is the one that rarely comes up in conversation.

If you reach the midpoint of your loan's amortization schedule and the balance still has not reached 78 percent of the original value, the lender or servicer must end PMI the month after that midpoint. Being current on your payments is required here as well.

Think of it as a floor. Even a loan that has not reached the 78 percent point by the halfway mark has an end date for its mortgage insurance.

Original value, not today's value, is the number that counts

Here is the part that trips people up, and for a Twin Cities reader it is the most useful thing in this article.

Both federal thresholds are measured against the original value of the home and against your scheduled amortization. They are not measured against what the home is worth today, and they are not moved forward by extra principal payments you have made.

That runs against intuition. When a home is worth more than it was at purchase, it feels obvious that the mortgage insurance requirement should be finished. The two rules described above do not work that way. They key on the original value and on the schedule the loan started with, so a rising market does not move either date by itself.

If your question is about a current appraisal, a different loan, or your servicer's own policies, that is a question about your specific file rather than a question this article can answer. Reach out to Chad and he will look at the actual terms with you.

What the Twin Cities market means for planning this

A short piece of local context, dated so you know exactly what it describes.

In July 2026 there were 11,586 homes for sale in the Twin Cities, up 6.7 percent year over year, with months supply of inventory at 3.0, up 7.1 percent. Statewide, inventory was 20,084 units in July 2026, up 9.1 percent, with months supply at 3.5 from 3.3 a year earlier. Those figures come from the July 2026 Minnesota housing market report published jointly by Minnesota Realtors, the Saint Paul Area Association of Realtors, and Minneapolis Area Realtors. In the same report, the associations described July as the most balanced any July has been statewide since 2017.

What that means for this article is narrow and practical. More homes on the market is room to plan the full cost of a purchase before writing an offer instead of after it. A balanced market is a reason to take your time rather than to hurry, and getting clear on the mortgage insurance line is exactly the kind of work that fits in the time it gives you.

Where these rules come from

Every mortgage insurance rule in this article comes from the Consumer Financial Protection Bureau's own consumer guidance. Both pages are short, plainly written, and worth reading yourself:

What is private mortgage insurance (https://www.consumerfinance.gov/ask-cfpb/what-is-private-mortgage-insurance-en-122/)

When can I remove private mortgage insurance from my loan (https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/)

Nothing about mortgage insurance pricing appears in this article, because pricing is not a federal rule and is not something an article can tell you honestly. That question belongs with your actual loan terms.

Frequently asked questions

What is private mortgage insurance?

Private mortgage insurance is insurance tied to a mortgage that might be required on a conventional loan when the down payment is less than 20 percent of the purchase price. The requirement usually also applies to a refinance when equity is less than 20 percent of the value of the home.

Does PMI protect me or the lender?

The lender. PMI protects the lender, not the borrower, if the borrower stops making payments. You pay the premium and the coverage belongs to the lender.

How is the PMI premium paid?

Three ways. Monthly, added to your mortgage payment. Once, as a one-time up-front premium paid at closing. Or both together.

When can I ask my servicer to cancel PMI?

When your principal balance is scheduled to fall to 80 percent of the original value of the home. Your servicer is legally required to honor the request when it is in writing, your payment history is good and you are current on payments, you certify that there are no junior liens, and the value of the property has not declined below its original value.

When does PMI end automatically without me asking?

On the date your principal balance is scheduled to reach 78 percent of the original value of the home, provided you are current on your payments. There is also a backstop. If you reach the midpoint of your loan's amortization schedule and the balance still has not reached 78 percent, the lender or servicer must end PMI the month after that midpoint, and again you have to be current.

Is PMI based on what my home is worth now or what I paid for it?

The two federal rules described above are measured against the original value of the home and against your scheduled amortization, not against a current market value and not against extra payments you have made. That is why a rising market does not end PMI on its own. A question about your particular loan, appraisal, or servicer is worth taking to Chad directly.

What happens if I am not current on my payments when I hit the threshold?

Being current is a condition of every rule described here. Borrower-requested cancellation at 80 percent requires a good payment history and being current. Automatic termination at 78 percent requires being current. So does the midpoint backstop. If you are behind, those conditions are not satisfied.

The next step

If you are buying in the South Metro with less than 20 percent down, the useful preparation is not treating mortgage insurance as something to avoid at any cost. It is knowing whether your loan will carry it, how the premium would be structured, and roughly where the two thresholds land on your amortization schedule, so it becomes a planned cost with an end date instead of a permanent mystery.

Visit https://www.chadkrueger.com/ to start that conversation. You can also call 612-382-8792 or email Chad@MinnTrust.com.