Can refinancing help lower or remove my PMI?

Yes, if the value of your home has increased enough to reduce your loan-to-value ratio (LTV) to 80% or less, refinancing can remove your PMI. Once you’ve been pre-approved for a mortgage refinance and have locked your rate, your Better Mortgage Home Advisor will order a home appraisal to get an unbiased opinion of your home’s value. If your mortgage balance is less than or equal to 80% of your home’s current value, then your new (refinance) loan will not have PMI.

If removing PMI is your goal, it’s important to note that when you’ve paid off enough of your mortgage to reduce your mortgage balance to 80% of your home’s purchase price, you can ask your lender to remove PMI. (The PMI charges will automatically be removed from your mortgage payments once your mortgage balance is equal to 78% of your home’s purchase price.) In either case, it’s worth exploring your refinance options, as refinancing to a lower interest rate may lower your monthly payments and save you more money in the long run.

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More resources

• A complete guide to what an appraisal is and the home appraisal process
• What to expect for your refinance process timeline
• The 3 most important numbers for your mortgage application
• Free Mortgage Refinance calculator: See how much you can save