How to Get a Lower Monthly Mortgage Payment

Do you want to decrease your monthly mortgage payment? Here’s how to go about it.

Rachel Curry - Author

Apr. 15 2022, Published 12:55 p.m. ET

If your monthly mortgage payment is putting a damper on your life, you may be able to lower it. Whether for added wiggle room for expenses, extra savings opportunities, or more chance to spend how you wish, lowering your monthly payment could be a solution.

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There are a few ways to go about decreasing your monthly mortgage payment. Explore your options so you know the best path forward for lowering your monthly expenses.

There are several options for lowering your monthly mortgage payment.

Here’s a rundown of options you have when looking to trim your mortgage payments:

  • Refinance your mortgage

  • Get rid of private mortgage insurance (PMI)

  • Apply for forbearance, recast, or a loan modification

  • Get better homeowners insurance

  • Boost your credit score before buying

  • Pay more down or get an adjustable rate

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Refinancing your mortgage for lower monthly payments.

You can refinance your mortgage for a lower monthly payment in one of two ways. You can refinance for a lower interest rate or a longer-term. Both of these options would trim your monthly payments.

If you’re looking to reduce your interest rate, refinancing may be wise if you can trim at least 0.75 percent. If you’re looking to increase the length of your mortgage loan period, know that you’ll pay more in interest over time. However, it could reduce what you pay per month to ease the burden.

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Should you get rid of private mortgage insurance for a lower mortgage payment?

If you bought a house with less than 20 percent of the money down, you probably have to pay something called private mortgage insurance (PMI). You can eliminate PMI without refinancing. All you have to do is pay off at least 22 percent of the home’s equity and it will fall off a conventional home loan.

If you have an FHA or USDA loan, you will need to refinance to get rid of PMI and reduce your monthly mortgage payments.

Forbearance, recast, or modification: More mortgage options

Mortgage forbearance allows you to pause your mortgage payments without harming your credit. This could be an option if you’re in a temporary financial bind that will resolve in time. At the end of the forbearance period, you will need to produce back payments for what you owe on the mortgage, so be prepared to pay.

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If your lender lets you do a mortgage recast, you could pay off a bigger chunk of your mortgage now for a potentially lower monthly payment moving forward. Alternatively, you may request a mortgage modification from your lender for a longer term, lower rate, or decreased principal.

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Shopping around for cheaper homeowners insurance can also lower your monthly payment.

Homeowners insurance is a necessity and an expense. Consider shopping around for more cost-effective insurance that will bring your overall monthly mortgage payments down.

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If you have time, work on your credit score.

If you haven’t yet bought a home and have a year or more to prepare, work on improving your credit score. The national average mortgage annual percentage rate (APR) for folks with credit scores between 620–639 is 5.787 percent. Comparatively, the average mortgage APR for people with credit scores between 760–850 is 4.198 percent.

Setting your mortgage up for a lower payment

If you can afford to do so, you can pay a little extra down at the time of purchase to trim your monthly payments. An adjustable rate mortgage (ARM) may also be worth considering when setting up your mortgage terms. Know that your payments will likely increase in the future with an ARM.


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