Refinancing can drop your PMI — but in a high-rate market it usually costs far more than it saves. Here's the honest comparison.
Check my details — free →For years, the standard advice was simple: if you want to get rid of PMI, refinance your mortgage. That made sense when rates were low and a refinance could lower your payment and drop your mortgage insurance at the same time.
It makes a lot less sense today. If you locked in a low rate, refinancing means trading it for a higher one — and paying thousands in closing costs — just to remove a charge that's a couple hundred dollars a month. There's a cheaper path most homeowners don't know about: cancelling PMI directly, using the right your loan already gives you under the Homeowners Protection Act.
The bottom line
For most homeowners who locked in a low rate, refinancing just to drop PMI is a bad trade: you'd surrender your rate and pay thousands in closing costs to remove a charge of a few hundred dollars a month. Cancelling PMI directly leaves everything else about your loan exactly as it is — and you only pay us if it actually works.
Start my free check →Only if your new loan lands below 80% loan-to-value — and you reach that by paying closing costs, taking today's interest rate, and resetting your loan term. If your only goal is removing PMI, that's an expensive way to do it.
Not at all. Cancelling PMI now doesn't prevent you from refinancing in the future. If rates fall enough to make a refinance worthwhile, you can still do it then — you'll just have already stopped paying PMI in the meantime.
The Homeowners Protection Act gives you the right to cancel PMI once you've built enough equity — by paying down the loan or because your home appreciated. We document that you qualify, handle the request and any valuation with your servicer, and follow it through until they confirm cancellation in writing.