Your Home Went Up in Value — So Why Are You Still Paying Mortgage Insurance?

On Thursday 22 October 2026, the President signed an executive order titled “Decreasing Housing Costs for the American People” — directing the Federal Housing Finance Agency to pilot automatic cancellation of mortgage insurance based on your home’s current value, not the price you paid years ago. If your home has risen in value, that sounds like free money. It is not — yet. The pilot covers future loans only, has no launch date, and changes nothing on your current mortgage. The good news: the rights you already hold today under a 1998 federal law may already let you drop the same payment — typically $150 to $250 a month — without waiting for Washington.

The short answer

Question	Answer
What did the 22 October order do?	It directs the FHFA to create a pilot that proactively cancels mortgage insurance once borrowers meet equity requirements based on the current market value of their home, makes the title-insurance waiver pilot permanent for refinances, creates a manufactured-housing task force, and directs the USDA and VA to cut rates on their direct single-family loans.
Will my PMI stop automatically now?	No. The pilot applies only to mortgages made after it is established, and no launch date or eligibility terms have been announced. It does not cancel PMI on existing loans.
Can I stop paying PMI today?	Possibly — under existing law. On a conventional loan you can request cancellation at 80% loan-to-value (based on original value), and your servicer must terminate it automatically at 78%. If your home has appreciated, a new appraisal may let you cancel sooner, on current value.
How much is PMI costing me?	Typically 0.46% to 1.50% of the loan amount per year — Freddie Mac puts it at roughly $30 to $70 a month for every $100,000 borrowed. On a $300,000 loan at 0.60%, that is about $150 a month, or more than $17,000 if it stays on the loan until year eight.
What if I have an FHA loan?	Different rules — and worse ones. Most FHA loans taken out since June 2013 carry mortgage insurance (MIP) for the life of the loan if you put less than 10% down. The usual escape is refinancing into a conventional loan once you have enough equity.

What the 22 October order actually does

The order, signed on 22 October 2026 and reported by Reuters the same day, has four parts. None of them changes your mortgage contract by itself — each one is a direction to an agency to build something:

• Proactive mortgage-insurance cancellation (the headline). The Federal Housing Finance Agency — which oversees Fannie Mae and Freddie Mac — is told to establish a pilot programme that cancels borrowers’ mortgage-insurance premiums once they have satisfied their equity requirements based on the current market value of their homes. Today, the automatic rules use the original value. The order also tells the FHFA to identify borrowers who may already qualify for cancellation under existing requirements. The National Association of Realtors welcomed it: its chief advocacy officer, Shannon McGahn, said the change “will put more money in some homeowners’ pockets.”
• Cheaper refinancing. The FHFA is told to make permanent its pilot waiving lender’s title insurance on eligible refinances, letting borrowers use lower-cost alternatives instead. The government-backed enterprises have reported savings of $500 to $1,500 per refinance from the waiver.
• More factory-built homes. A Task Force on Manufactured Housing Innovation, co-chaired by the Housing Secretary and the FHFA Director, is charged with expanding the use of modern manufacturing in homes eligible for federal programmes.
• Lower rates on government direct loans. The Agriculture and Veterans Affairs secretaries are directed to reduce interest rates on single-family home loans issued directly by their departments — aimed at rural homebuyers and at veterans using VA direct loans.

Context matters: the order was signed less than two weeks before the 2026 midterm elections, and housing costs are a live political issue. Mortgage rates remain high — the 30-year fixed averaged 7.32% in Freddie Mac’s 22 October survey, its first decline in nine weeks but still 1.13 points above a year ago. Industry reaction has been split: the Realtors’ association praised it, while some mortgage executives called it “a long play” whose benefits consumers will feel “years from now.” Both can be true. The honest reading is that this order sets a direction; the FHFA still has to write the pilot, set the terms, and pick a start date — none of which exists yet.

The rights you already have today

This is the part of the story most coverage skips — and it is where your money is. Private mortgage insurance protects the lender, not you: if you default and the sale does not cover the balance, the policy makes the lender whole. You pay for it. Federal law — the Homeowners Protection Act of 1998 — gives you three routes off it on a conventional loan:

Route	How it works
Request cancellation — 80%	Once your loan balance reaches 80% of your home’s original value (the lower of the purchase price or the appraised value at closing), you can ask your servicer in writing to cancel PMI. You must be current on payments, have a good payment history, and certify you have no second mortgage or other junior lien. No new appraisal is needed on this route — scheduled payments or extra principal payments can get you there.
Automatic termination — 78%	If you never ask, your servicer must terminate PMI once your balance is scheduled to reach 78% of the original value, as long as you are current. There is also a backstop: PMI must end at the midpoint of your loan term (year 15 on a 30-year mortgage) even if the balance has not reached 78%.
Current-value route — appraisal	If your home has risen in value, your real equity may be far higher than the original price suggests. Fannie Mae and Freddie Mac servicing rules let you request cancellation based on a current valuation. For a Fannie Mae loan on a one-unit primary home, the usual threshold is 75% loan-to-value if the loan is two to five years old, and 80% after five years; substantial improvements can waive the two-year minimum at 80%. You will typically pay for the appraisal (often up to about $500) and your servicer — not you — orders or approves the valuation method. A tax assessment or an online estimate alone will not do it.

Worked example: you bought a home for $320,000 with 5% down, so your loan was $304,000. On original value, you can request cancellation when the balance falls to $256,000 (80% of $320,000) — years of payments away. But if the home is now worth $400,000, your balance is already at 76% of current value. On the current-value route, you may qualify now, for the cost of an appraisal. That is the gap the new pilot is meant to close automatically — for future loans. For your current loan, the appraisal route is the way to close it yourself.

How much PMI actually costs

PMI is priced on your credit score, your down payment and your loan type. The ranges below are industry benchmarks for 2026, not a quote — your exact premium appears on your Loan Estimate and Closing Disclosure:

Loan amount	Typical monthly PMI
$100,000 borrowed	$30–$70 a month (Freddie Mac benchmark)
$300,000 loan at 0.60% a year	About $150 a month — over $17,000 if it stays until year eight
$400,000 loan	$153–$500 a month, depending on credit profile
$450,000 loan, high-600s credit, 90–95% LTV	Roughly $370–$450 a month

The credit-score spread is the quiet scandal of PMI: a borrower with a 760+ score can pay a fraction of the rate a borrower in the high 600s pays on the same loan. If your score has improved since you bought, that is a second reason to look at your PMI now — and our credit score guide explains the fastest ways to move it. Do the simple test before paying for an appraisal: take your unpaid principal balance from your latest statement, divide it by a realistic current value, and compare the result with the thresholds above. If you are close to 80% on current value but far from it on original value, the appraisal route is worth a phone call. If automatic termination at 78% is only a few months away, the appraisal fee could eat the entire benefit — wait instead.

If you have an FHA loan, the rules are different — and harsher

FHA loans do not have PMI; they have mortgage insurance premium (MIP), and the Homeowners Protection Act does not cover it. For most FHA loans taken out since June 2013, MIP lasts for the life of the loan if you put less than 10% down, or 11 years if you put 10% or more down. It does not fall off when you hit 80% equity. The standard escape is refinancing into a conventional loan once your equity and credit score qualify — which also removes MIP entirely, and if your new loan-to-value is 80% or less, you avoid conventional PMI as well. The maths is a break-even test: divide the refinance closing costs (typically 3% to 6% of the new loan) by the monthly MIP you would eliminate. If you plan to stay well past the break-even point, the refinance usually pays; if you might sell within a year or two, the closing costs can wipe out the saving. Note also that lender-paid PMI on a conventional loan cannot be cancelled at all — the lender pays the premium and recoups it through a permanently higher rate — and single-premium PMI paid upfront at closing is not refundable if you refinance quickly.

What to do this week

• Find your PMI line. Check your latest mortgage statement for the monthly PMI or MIP amount, and your unpaid principal balance. If you cannot find it, your servicer must tell you — the law requires an annual PMI disclosure.
• Work out both LTVs. Balance ÷ original price, and balance ÷ realistic current value. If the first is at or below 80%, write to your servicer and request cancellation. If only the second is, ask your servicer for their current-value cancellation checklist — what valuation they accept, who orders it, and what it costs — before you pay for anything.
• Check your payment history. Late payments can delay or block cancellation even if the loan-to-value looks right. Bring the account current first and ask what “good payment history” means in your servicer’s process.
• If you have an FHA loan, price the refinance. Compare your monthly MIP against refinance closing costs, and check whether your equity and credit score now qualify you for a conventional loan. At 7.32% mortgage rates, the refinance only wins if the MIP saving beats the rate change — run both numbers, not one.
• If you are refinancing anyway, ask about the title waiver. The permanent waiver pilot means lower-cost alternatives to lender’s title insurance on eligible refinances — reported savings of $500 to $1,500 per refinance. Ask your lender whether your refinance qualifies.
• Do not wait for the pilot. It covers future loans only, has no start date, and even once it exists, new loans must season and build equity before cancellation is on the table. Your existing rights are available now.
• If your servicer refuses a cancellation you believe you qualify for, put it in writing, keep copies of everything, and you can report the experience to the Consumer Financial Protection Bureau.

For readers in the UK and Canada

The bottom line

The 22 October order is genuinely good news for future homebuyers — a system that cancels mortgage insurance automatically when equity is there, instead of making borrowers discover the rule and fight for it, is a real improvement. But it is not a cheque in the post. No pilot exists yet, no date is set, and your current loan is not covered. The money available today is the PMI you may already be entitled to stop paying: check your balance, work out both loan-to-value figures, and call your servicer. At $150 to $250 a month, a single phone call and an appraisal can be worth thousands — and unlike the pilot, it does not require an act of Congress or a rulemaking to start.

Related LifeTurn Money guides: our Fed decision guide (why mortgage rates are at 7.32% and what 28 October means for them), improve your credit score (the fastest way to cheaper PMI — and a cheaper everything else), and retirement catch-up after 40 (what to do with the $150 a month once PMI is gone).