US President Donald Trump has signed an executive order directing federal agencies to reduce certain mortgage costs, including through the automatic cancellation of mortgage insurance for eligible future borrowers and a permanent programme designed to lower refinancing expenses.
The order, titled “Decreasing Housing Costs for the American People”, comes as high interest rates and inflation continue to make homeownership less affordable. However, the extent of the savings for consumers remains unclear, according to Keith Gumbinger, vice-president of mortgage website HSH, who said more details were needed to assess the measures’ likely impact.
Federal Housing Finance Agency director Bill Pulte said in a post on X on Thursday that “millions of Americans will save thousands and thousands of dollars”. The executive order was issued less than two weeks before the 3 November midterm elections, with housing affordability and rising living costs prominent concerns among voters.
The order builds on earlier measures by the Trump administration, including restrictions targeting Wall Street firms buying single-family homes. The affordability challenge has intensified in recent years: in 2025, the monthly payment on a 30-year fixed-rate mortgage for a median-priced home amounted to about 33% of median family income, up from 26% in 2022, according to the Federal Reserve’s Survey of Consumer Finances, published in early October.
One of the order’s main provisions directs the FHFA to establish a pilot programme to cancel mortgage insurance proactively for eligible borrowers once their home equity reaches a specified threshold. The measure would apply to mortgages originated after the programme launches.
Conventional mortgages, which are not insured or backed by US government programmes, generally require private mortgage insurance, known as PMI, when a borrower makes a down payment of less than 20%. Federal Housing Administration mortgages, by contrast, require mortgage insurance on all loans.
Under existing rules, conventional borrowers can generally request the removal of PMI once their outstanding loan balance falls below 80% of the home’s original purchase price. Loan servicers may automatically remove the insurance when the balance reaches 78% of the original value, subject to applicable requirements.
The cost of PMI typically ranges from 0.2% to 2% of the loan amount annually, depending on factors including the down payment, credit score and amount borrowed, according to Fannie Mae. For a $600,000 home purchased with a 10% down payment and financed through a 30-year fixed-rate mortgage at 7.3%, monthly mortgage insurance could amount to $351, according to a Freddie Mac calculator.
Gumbinger said many borrowers currently carried PMI, reflecting high house prices and relatively small down payments in recent years. The median down payment in the second quarter of 2026 was 13.7% of the purchase price, or $27,100, according to a September report from Realtor.com.
The executive order also directs the FHFA to make permanent a pilot programme that waives the lender’s title insurance policy for certain refinances and permits lower-cost alternatives. The programme had originally been scheduled to run until November 2027 and was limited to refinances with loan-to-value ratios below 80% in a handful of states.
Former FHFA director Sandra Thompson estimated in 2024 that borrowers could save between $500 and $1,500 in closing costs on loans covered by the programme. Title-related fees generally account for the largest share of mortgage closing costs, according to a 2025 Urban Institute report.
As of 23 October, the average interest rate on a 30-year fixed-rate mortgage stood at 7.32%, according to Freddie Mac. Mortgage refinancing demand had fallen 59% in mid-October compared with the same week a year earlier.
Gumbinger said making refinancing cheaper could help borrowers but cautioned against expecting a substantial change in overall housing affordability, which he said remained largely determined by home prices and mortgage rates.
