Trump promises mortgage relief ahead of US midterms, but will US homeowners really save? Explained | Today’s news
US President Donald Trump’s latest executive order promises to lower mortgage costs for millions of Americans ahead of the Nov. 3 election. But the question remains how much American homeowners could save and whether Trump’s proposed measures will provide meaningful relief as housing affordability continues to deteriorate.
Titled Lowering Housing Costs for the American People, the order aims to help eligible buyers stop paying mortgage insurance earlier while making it cheaper for homeowners to refinance their existing loans.
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Federal Housing Finance Agency (FHFA) Director Bill Pulte said on X Thursday that “millions of Americans will save thousands and thousands of dollars.”
However, Keith Gumbinger, vice president of mortgage website HSH, cautioned that the financial impact is still difficult to determine without more details on the implementation, according to a CNBC report.
US housing affordability worsens ahead of midterm elections
Donald Trump’s announcement comes less than two weeks before the midterm elections, when American households are weighed down by the rising cost of living and housing affordability.
Monthly payments on a 30-year fixed-rate mortgage on a median-priced home represented about 33% of median family income in 2025, compared with 26% in 2022, according to the Federal Reserve’s latest Survey of Consumer Finances, released in early October.
Notably, Trump’s executive order did not lower mortgage rates. Instead, it aims to reduce mortgage insurance and refinancing costs
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The average 30-year mortgage rate in the US was 7.32% as of October 23.
Separately, rates fell from 7.40% to 7.32%, down 0.08 percentage point, according to an Oct. 22 report from Freddie Mac. This was a market move, not a Trump-ordered cut.
Who is eligible for Trump mortgage insurance relief?
The central provision directs the FHFA to establish a pilot program that proactively cancels mortgage insurance once eligible borrowers have accumulated a certain level of equity.
However, the program would apply to qualified mortgages originated after it launched, meaning existing borrowers would not automatically benefit from the new foreclosure process.
Conventional mortgage borrowers generally pay private mortgage insurance (PMI) when their down payment is less than 20%.
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Under existing rules, borrowers can typically request PMI waivers when their loan balance reaches 80% of the property’s original value. Automatic termination generally occurs at 78%, depending on the conditions involved.
According to Fannie Mae, the annual cost of PMI is typically between 0.2% and 2% of the loan amount.
For perspective, Freddie Mac’s mortgage calculator estimates that buying a $600,000 property with a 10% down payment and a 7.3% mortgage rate could generate $351 in monthly insurance costs, which equates to $4,212 per year.
Therefore, the proposed changes could provide significant savings to eligible borrowers once they become eligible for cancellation.
Can Homeowners Save Up to $1,500 on a Mortgage Refinance?
The executive order also seeks to make permanent the FHFA pilot program that allows eligible refinance transactions to take place without traditional lender title insurance and replace it with less expensive alternatives.
The program was originally supposed to run until November 2027, but was limited to certain states and refinancing transactions with a loan-to-value ratio of less than 80%.
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Former FHFA Director Sandra Thompson estimated during an April 2024 congressional hearing that qualified borrowers could save $500 to $1,500 in foreclosure costs.
However, refinancing activity remains muted. Demand fell 59% in mid-October from the corresponding week last year, while the average 30-year fixed mortgage rate was 7.32% as of Oct. 23, according to Freddie Mac.
Will Trump’s mortgage order bring immediate savings?
Despite the Trump administration’s projections, the proposals do not guarantee immediate financial relief for all existing homeowners.
The insurance cancellation pilot focuses on eligible future mortgages, while the savings refinance depends on borrowers meeting the program’s requirements.
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Gumbinger also questioned whether lowering transaction costs would substantially improve affordability while home prices and borrowing rates remain elevated.
Any benefits will depend on federal implementation, eligibility requirements and how many borrowers are eligible for the proposed relief.
