Refinancing is often considered the go-to way to reduce mortgage costs, but it’s not your only option.
By rethinking how you manage your mortgage, you can cut monthly payments, reduce total interest, and save thousands over time—all without the hassle of refinancing.
Here are four actionable strategies to start saving now.
1. Cancel Private Mortgage Insurance (PMI)
If you didn’t put down at least 20% when buying your home, you’re likely paying Private Mortgage Insurance (PMI), which doesn’t end automatically until you reach 22% equity. This added cost can mean thousands over the life of your loan.
You can cancel PMI by building 20% equity in your home through extra payments or a home value appraisal. Some lenders even allow early removal if you show accelerated equity growth—check with yours to explore options.
Pro Tip: Why pay more for home insurance? Compare quotes from top providers today and find the best price for your needs.
2. Drop Escrow Payments
Escrow accounts, used to collect property taxes and insurance premiums, add convenience—but they also come at a cost. Many lenders charge a service fee, which could be as high as 5% of your escrowed payments.
For example, if your homeowners insurance is $100 a month and your property taxes are $2,000 annually, you could be paying an extra $160 each year in fees.
If you have more than 20% equity in your home, you may qualify to drop escrow and handle these payments yourself. While this can save you money, managing taxes and insurance independently requires careful planning. A financial advisor can help you stay organized and avoid costly mistakes.
Pro Tip: If you have more than $100,000 in savings, this might be a good time to get advice from a pro. SmartAsset offers a free service that matches you to a fiduciary advisor in less than 5 minutes.
3. Lower Your Homeowners Insurance Premiums
Homeowners insurance is essential, but overpaying isn’t. Shopping around can uncover big savings, as rates vary widely between providers for similar coverage.
To save, compare quotes regularly, bundle your home and auto insurance, or increase your deductible to lower premiums. Don’t forget to check for discounts or remove unnecessary coverage to keep costs down without sacrificing protection.
Pro Tip: Bundling your home and auto insurance could save you hundreds annually. Compare quotes now to find a bundle that works for you.
4. Challenge Your Property Tax Assessment
If your home’s assessed value is higher than its actual market value, you could be paying too much in property taxes. A National Association of Realtors report found that residential properties have been over-assessed by as much as 60%, costing homeowners billions in unnecessary taxes.
To challenge your assessment:
- Review your property tax bill for errors.
- Gather evidence, such as recent sale prices of comparable homes.
- File an appeal with your local tax assessor’s office.
A successful appeal could save you hundreds—or even thousands—of dollars annually.
Small Changes, Big Savings
You don’t need to refinance to save big on your mortgage. Canceling PMI, dropping escrow, reducing insurance premiums, or challenging property taxes are all effective ways to lower costs.
By combining these strategies, you could save over $1,000 a year and free up more of your budget for what matters most. Take action today and start cutting down your mortgage costs.
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