While lending institutions have been obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance dips under 78% of the price of purchase, they do not have to take similar action if the equity is more than 22%. (There are exceptions -like a number of "high risk' loans.) However, if your equity gets to 20% (no matter what the original purchase price was), you are able to cancel PMI (for a mortgage closed after July 1999).
Familiarize yourself with your mortgage statements to keep a running total of principal payments. Find out the selling prices of other houses in your immediate area. Unfortunately, if yours is a new mortgage loan - five years or under, you probably haven't been able to pay a lot of the principal: you are paying mostly interest.
At the point your equity has risen to the required twenty percent, you are close to getting rid of your PMI payments, for the life of your loan. You will need to contact your mortgage lender to alert them that you want to cancel PMI payments. Then you will be asked to submit proof that you are eligible to cancel. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and most lenders will require one before they'll cancel PMI.
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