How to lower your mortgage payment without refinancing
Six ways to lower the payment while keeping your loan, with a recast first.
01 Six ways to lower your mortgage payment without refinancing your loan
1. After a lump sum, recast
The rate and end date stay the same, but the payment drops. A lump sum of $30,000 on a $300,000 loan at 6.5% saves $202.56 each month. Mortgage recast payment calculator
2. Remove private mortgage insurance coverage
By law, PMI ends at 78% of the original value on a conventional loan, and you can ask at 80%. CFPB PMI removal details
3. Appeal the assessment of your property tax
Because taxes are paid through escrow, a lower assessment reduces your payment when escrow is next reviewed.
4. Shop around for homeowners insurance
If you keep the same coverage, a lower-priced policy reduces the escrow portion of what you pay.
5. Request an escrow analysis
A lower tax or insurance bill for the prior year lets the servicer recalculate the escrow payment and refund the surplus.
6. In hardship, ask about a loan modification
If you cannot pay, a modification changes your loan terms. Your credit can be affected by this request, which is separate from a recast.
02 Lower payment questions you may have
Which approach costs the least to reduce a mortgage payment?
With a lump sum, a recast carries a fee of $0 to $500, and the rate stays. With no lump sum, start by checking PMI and escrow.
Can I lower my payment without making a lump sum payment?
Yes. Once you reach the loan-to-value level the law sets, you can remove PMI. You can also appeal a high tax assessment, shop for homeowners insurance, or ask whether a modification is available from your servicer if you are in hardship.