Refinancing
Refinancing to Remove Mortgage Insurance
When refinancing is the right way to eliminate FHA mortgage insurance or conventional PMI, and when you can remove it without a new loan.
Updated 2026-08-21| Applies to: Homeowners paying monthly mortgage insurance who have gained equity.
The short answer
Conventional private mortgage insurance can often be removed without refinancing once equity requirements are met. FHA mortgage insurance on most current loans lasts the life of the loan when the original down payment was small, so refinancing into a conventional loan is usually the only way to eliminate it. Whether it is worth doing depends on the rate difference and the size of the insurance premium.
Conventional PMI: refinancing is often unnecessary
Conventional mortgage insurance can typically be cancelled based on equity, either automatically at defined amortization milestones or by request with supporting value evidence. Start with your servicer's written cancellation requirements before paying for a new loan.
FHA mortgage insurance: refinancing is usually required
On most FHA loans originated with a minimum down payment, the annual mortgage insurance premium remains for the life of the loan. Refinancing into conventional financing, once you have sufficient equity and qualifying credit, is the standard way to remove it.
The math that decides it
- 1.Current payment including the insurance premium.
- 2.New conventional payment at today's rate with no insurance.
- 3.Closing costs divided by the monthly savings to get a break even.
- 4.Whether you plan to keep the home past that point.
It is entirely possible for a refinance to make sense even at a slightly higher interest rate, if the removed insurance premium is large enough.
If you have an FHA loan from a higher priced year, this is one of the most common wins I see. It only takes a few minutes to check.
Educational purposes only. Refinance and VA loan guidelines vary by program, borrower circumstances, property type, entitlement status, documentation and lender requirements. All financing is subject to application, verification, applicable program guidelines and underwriting approval. Not a commitment to lend. Manny Oloyede | Mortgage Broker | NMLS 1824463 | Ultimate Mortgage Brokers LLC. Equal Housing Opportunity.
Frequently Asked Questions
People also ask
Can I switch from FHA to conventional later?
Many borrowers refinance from FHA to conventional once they have enough equity and qualifying credit, which can remove ongoing mortgage insurance, though refinancing has its own costs to weigh.
Read: FHA vs Conventional Loans: How Do They Compare?How soon after buying can I refinance?
This depends on the loan program and lender, and some loans have waiting periods before a refinance is allowed; ask your loan officer about the specific rules for your loan.
Read: When Does Refinancing Make Sense?Can PMI be removed without refinancing?
Often yes. Once the loan balance reaches a certain percentage of the original or current home value and payment history qualifies, borrowers can typically request cancellation directly from their servicer without a refinance.
Read: Private Mortgage Insurance (PMI) ExplainedDoes PMI come off automatically?
Conventional PMI generally terminates automatically at 78% of the original value on the original schedule, if payments are current.
Read: How and When to Remove PMIHow long does a refinance take?
Commonly a few weeks, driven mainly by appraisal scheduling, title work and how quickly documents come back.
Read: Refinancing Explained: How a Refinance Actually WorksIs a cash out refinance more expensive?
Generally yes. Pricing adjustments for cash out are typically higher than for rate and term at the same credit score and loan to value.
Read: Rate and Term vs Cash Out RefinanceTerms used in this guide
- Equity
- The difference between what your home is worth and what you still owe on loans secured by it.
Written by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
Keep reading
How and When to Remove PMI
The difference between requesting PMI cancellation, automatic termination and refinancing out of mortgage insurance, plus what FHA borrowers should know.
Mortgage CostsPrivate Mortgage Insurance (PMI) Explained
How private mortgage insurance works on conventional loans, how it differs from FHA mortgage insurance, and when it can be removed.
RefinancingHow Much Equity Do I Need to Refinance?
Equity requirements for rate and term, cash out, investment property and streamline refinances, plus how mortgage insurance changes the math.
Mortgage ProgramsFHA vs Conventional Loans: How Do They Compare?
Compare FHA and conventional mortgages on down payment, credit, mortgage insurance, property rules, loan limits and long term cost so you can weigh which path may fit.
Questions about your own numbers?
Send over your goal, income type and timeline and you'll get a straight answer on what is realistic.