Know which date means what
What the dates are measured against
The tool follows your payment schedule and compares what you still owe with what the home was worth when you bought it. That starting value is the lower of the price you paid and the appraisal. A later rise in house prices does not count here.
80% is asking, 78% is automatic
At 80% you get the right to ask, if you meet the conditions. At 78% the lender has to end it without being asked, as long as your payments are current. Paying extra can bring the asking date forward, because it is based on what you really owe. It does not move the automatic date, which follows the original schedule no matter what you pay.
What that looks like with 5% down
A $380,000 loan on a $400,000 home starts at 95% of the value. Early payments are mostly interest and only a little loan, so getting down to 80% takes years. Paying extra cuts the balance faster and can move that date up.
Where this does not apply
- FHA and VA loans work differently.
- If the lender pays the insurance instead of you, the rules change.
- Your lender may want proof the home has not lost value.
- A second loan on the home, or missed payments, can get in the way.