Under the new rules, when your loan balance drops 20 percent below the original purchase price you can request PMI cancellation. When your loan balance is 22 percent below the original purchase price, then PMI is canceled automatically. The rules only apply to loans made on or after July 29, 1999. The HPA rules do not apply to millions of older loans, FHA financing and VA loans. With FHA however, the situation is different.
Federal rules being federal rules, there are exceptions.
The catch, of course, is that most loans are not outstanding 11 or 12 years. A quarter of repeat homebuyers had owned their previous homes for three years or less. A third of repeat buyers had been in their previous homes for at least 10 years. But even if people stay in their homes, there's a strong likelihood that their original loan has long-since been refinanced. What's missing here is any credit for appreciation.