7 Ways to Lower Your Monthly Mortgage Payment

Mortgage Guides · Updated for 2026 · About an 8-minute read

Your mortgage payment is usually your biggest monthly bill, so trimming it — even modestly — frees up real money. Some of these strategies apply before you close on a loan; others can help years into homeownership. Here are seven practical ways to lower your monthly mortgage payment in 2026, with the trade-offs to watch for on each.

1. Shop Multiple Lenders

The simplest lever is also the most overlooked: get quotes from several lenders instead of accepting the first offer. Rates and fees vary from lender to lender for the exact same borrower, and even a small rate difference changes your monthly payment. Because scoring models treat multiple mortgage inquiries within a short window as a single event, rate shopping generally won't hurt your credit. Whether you're buying or refinancing, comparing offers is the closest thing to free money in the mortgage process.

2. Refinance to a Lower Rate

If rates have fallen since you closed, or your credit has improved, refinancing into a lower rate can meaningfully reduce your payment. The catch is closing costs, so you'll want to confirm you'll stay in the home long enough to break even. Our guide on when refinancing makes sense walks through the exact break-even math so you can tell whether it's worth it in your situation.

3. Recast Your Mortgage

A mortgage recast is a lesser-known option worth asking your servicer about. You make a large lump-sum payment toward your principal, and the lender re-amortizes the remaining balance over your existing term — lowering your monthly payment without changing your interest rate or requiring a full refinance. Recasting usually carries only a small fee and no new credit check or appraisal. The trade-off is that it ties up a chunk of cash in your home, and not all loan types (such as many government-backed loans) are eligible.

4. Get Rid of PMI or Mortgage Insurance

If you're paying private mortgage insurance, eliminating it can save you a meaningful amount each month. On conventional loans, you can typically request PMI cancellation once you reach about 20% equity, and lenders generally must remove it automatically at 22% equity based on your original value. FHA loans are trickier — their insurance often lasts the life of the loan, so many borrowers refinance into a conventional loan to shed it. Our down payment guide explains how mortgage insurance works across the different loan types.

5. Extend Your Loan Term

Refinancing from a 15-year loan to a 30-year loan, or resetting a 30-year term through a refinance, spreads your balance over more years and lowers each monthly payment. This can provide breathing room in a tight budget — but be clear-eyed about the trade-off: a longer term almost always means paying more total interest over the life of the loan, and it slows how quickly you build equity. Use it deliberately, not by default. You can model the difference with our free mortgage calculator.

6. Appeal Your Property Tax Assessment

A large share of your monthly payment often goes to property taxes and homeowners insurance held in escrow. If you believe your home has been over-assessed — for example, if comparable homes nearby are valued lower — you can appeal your assessment with your local tax authority. A successful appeal reduces your tax bill and, in turn, your escrow portion of the monthly payment. Check your local deadlines and process, since they vary by jurisdiction.

7. Shop Your Homeowners Insurance

Homeowners insurance is another escrow item that many people set once and forget. Premiums can differ significantly between carriers, so re-shopping your policy every year or two — and bundling it with auto insurance where it makes sense — can lower your escrow payment. Just be sure you're comparing equivalent coverage, not simply chasing the lowest price, so you're not underinsured when you need it most.

Putting It Together

You don't have to pick just one of these. Many homeowners combine several — say, dropping PMI and shopping insurance, or refinancing while also appealing a tax assessment — to stack the savings. Start by looking at what makes up your current payment: principal and interest, mortgage insurance, taxes, and insurance. That tells you which levers have the most room to move. And whether you're buying or refinancing, comparing lenders remains the foundation of a lower payment. If you're still in the buying phase, our guide on pre-approval vs. pre-qualification can help you approach lenders from a position of strength.