What is the equity percentage required for the cancellation of private mortgage insurance?

The correct answer is 20%. This percentage represents the equity level a homeowner must achieve in their property before they can request the cancellation of private mortgage insurance (PMI). PMI is usually required by lenders when a borrower puts down less than 20% of the home's purchase price. Once the borrower has built up sufficient equity—typically reaching the 20% threshold—the lender is obligated to remove PMI from the mortgage payments. This is an important consideration for homeowners, as PMI can significantly increase monthly expenses. Understanding this requirement helps individuals in financial planning and managing their mortgage effectively.