Can I Refinance with 10% Equity? Requirements & Options

Refinancing may lower your rate, reduce your monthly payment, remove PMI, or help you switch loan types — but what if you only have 10% equity in your home? Is refinancing still possible?

Short answer:

Yes, refinancing with 10% equity may be possible, but your loan options, pricing, and approval odds depend heavily on your loan type, credit profile, DTI, and appraisal results. Ten percent equity puts you at 90% LTV, which can still be considered a higher-risk tier for lenders — often meaning stricter requirements and higher costs.

This guide discusses which programs allow a 90% LTV, how it affects rates and PMI, and smart strategies to qualify. You’ll also see when refinancing doesn’t make sense at 90% LTV — and how to benchmark any offer you receive to confirm whether it’s actually competitive.

Key Takeaways

• There are often options to refinance with 10% equity (90% LTV), especially with FHA or certain conventional rate-and-term refinances

• PMI is required for conventional loans at 90% LTV, and pricing often includes risk-based adjustments

• Cash-out refinances are typically not allowed at 10% equity

• Credit score, DTI, and appraisal strength play a major role in approvals

• Improving your appraisal or paying down a small amount of your balance may significantly strengthen your file.

💡 Pro Tip: Lender pricing can vary significantly at 90% LTV. Not shopping around could cost you thousands. Get offers from different lenders to compare interest rates, closing costs, and APRs.

Can You Refinance With Just 10% Equity?

Short version: Yes, but your choices may be limited, and pricing is often less favorable than at 80% LTV or lower.

At 10% equity, your LTV is roughly 90%, which matters because:

• Many lenders see 90% LTV as higher risk

• PMI is required on all conventional loans

• Rate pricing may include additional risk-based adjustments

• Appraisal accuracy becomes extremely important

However, several refinance programs still allow homeowners to refinance with as little as 10% equity.

Refinance Options at 10% Equity (90% LTV)

1. Conventional Rate-and-Term Refinance (Allowed up to 95% LTV)

Conventional loans allow refinances up to 95% LTV, meaning 90% LTV is well within eligibility (actual requirements vary by lender).

You may be able to refinance if:

• You’re choosing a rate-and-term refinance (not cash-out)

• You meet credit score requirements (typically 680–700+; actual numbers vary by lender)

• Your DTI is strong (usually ≤ 45%)

• Your appraisal supports your home value

Limitations:

• PMI is required at 90% LTV

• Pricing adjustments may increase your rate

• Removing PMI is not possible until you reach 80% LTV

2. FHA Refinance (Most Flexible for Low Equity)

FHA can be a viable option for some borrowers at 10% equity. Requirements include:

• Rate-and-term LTV limit: Up to 97.75% (varies by lender and seasoning requirements)

• Credit score minimums: 580+ (varies by lender)

• DTI flexibility: Higher than conventional (varies by lender)

• PMI (MIP): Required

If you currently have an FHA loan, an FHA Streamline Refinance may allow you to refinance:

• With no appraisal (in many cases)

• Minimal documentation

• No income verification for some borrowers

FHA is the most forgiving program for low-equity borrowers, but exact requirements can vary by borrower.

3. VA Refinance (If You’re Eligible)

If you have a VA loan, equity requirements can be extremely flexible.

VA IRRRL (Streamline):

• No equity requirement

• Often no appraisal

• Very fast approval

If you have a VA loan, 10% equity may not be a barrier, but the exact requirements vary by lender.

VA cash-out, however, usually requires at least 10–20% equity remaining after closing, depending on lender requirements.

4. Jumbo Loans

Jumbo refinancing at 90% LTV can be challenging.

Most jumbo lenders require:

• 20–30% equity

• 720–760+ credit

• Strong reserves

• Low DTI

If you have a jumbo loan and only 10% equity, it can be challenging to find a willing lender, but because each lender’s requirements differ, it’s important to shop around.

How 10% Equity (90% LTV) Affects Pricing

Many lenders charge more for higher LTVs because the risk of loss is greater.

Here’s what you can expect in general, but each lender differs:

1. Higher Interest Rates

90% LTV often triggers risk adjustments of:

• 0.25% to 0.625% on conventional loans on average

FHA & VA loan adjustments may not be as high, but it depends on many factors, including lender pricing, borrower profile, and any compensating factors you have, such as a high credit score or low debt-to-income ratio.

2. PMI Is Required

At 90% LTV:

• Conventional PMI is required

• PMI may be more expensive than at lower LTV tiers

• Removal only becomes possible once you reach 80% LTV

3. Stricter Requirements

Lenders may add:

• Additional underwriting scrutiny

• Higher reserve requirements

• More conservative loan approval criteria

💡 Pro Tip: Because even a 1/8th of a difference in interest rate or a few thousand dollars in closing costs can make a tremendous difference in whether refinancing makes sense, shopping around to find the best deal is essential.

What a Refinance Looks Like at 10% Equity

Example Scenario

Home value: $450,000

Loan balance: $405,000

Equity: 10%

LTV: 90%

Expected outcomes:

• PMI required

• Rate slightly higher due to risk-based adjustments

• Appraisal must come in strong

• Approval depends heavily on credit & DTI

• The break-even point may take slightly longer

When Refinancing May Not Make Sense at 10% Equity

You may want to delay refinancing if:

• Rate savings are small

• PMI costs offset monthly savings

• You plan to move within 2–3 years

• You’re switching into an FHA loan with expensive MIP

Use this formula to evaluate:

Break-Even = Total Costs ÷ Monthly Savings

If break-even > your expected time in the home, refinancing may not be worth it.

How to Improve Approval Odds at 90% LTV

Even with only 10% equity, you may significantly improve your chances using these tips.

1. Improve your appraisal

Small upgrades can increase value:

• Landscaping

• Fresh paint

• Updated lighting

• Decluttering before appraisal

• Providing strong comparable sales

💡 Pro Tip: A few thousand dollars' worth of value can shift pricing tiers, but each lender is different. Only getting a quote from a single lender can leave thousands of dollars on the table. Use Fincast to compare your options and see if vetted lenders can compete with your offer.

2. Pay down your loan

Even $3,000–$10,000 can:

• Lower your LTV

• Reduce PMI

• Improve pricing

3. Boost your credit score

In many cases, LTV risk + lower credit = expensive pricing.

Improve credit by:

• Paying down card balances

• Avoiding new inquiries

• Removing errors

• Making all payments on time

💡 Pro Tip: Even a 20–40 point improvement in credit scores may save thousands, as lenders often improve pricing with higher credit scores.

4. Reduce your DTI

Lenders often tighten DTI limits at higher LTVs.

Lower DTI by:

• Paying off debts with high monthly payments

• Adding a co-borrower

• Increasing documented income

5. Choose the right loan program

Determine which loan program your qualifications best fit to improve your chances of securing competitive pricing.

Alternatives if You Can’t Refinance Yet

If refinancing isn’t feasible at the moment, consider these alternatives:

• Wait and build equity through payments + appreciation

• Make a partial principal paydown to lower LTV

• Request a mortgage recast if your lender offers it

• Switch to FHA or VA if eligible

How Fincast Can Help

At higher LTVs, lenders’ pricing differences are often significant — sometimes thousands of dollars. Applying with several lenders yourself can be time-consuming, frustrating, and feel like a violation of your privacy, but failing to secure multiple offers can leave thousands of dollars on the table.

Fincast helps simplify it with these steps:

1. Upload your Loan Estimate

2. Fincast analyzes your offer

3. Vetted lenders compete to beat it

4. You choose the best deal

FAQs: Refinancing With 10% Equity

1. Can I refinance with 10% equity?

Yes — FHA, VA, and many conventional rate-and-term refinances allow it, but whether you’ll qualify depends on your borrower profile and lender requirements.

2. Can I do a cash-out refinance with 10% equity?

No. Most lenders require that you leave 20–25% equity after closing.

3. Will I need PMI at 90% LTV?

Yes. Conventional loans require PMI for LTVs above 80%. FHA loans require mortgage insurance (MIP), which lasts 11 years if your original LTV was 90% or less, or for the life of the loan if it exceeded 90%, depending on when the loan was originated.

4. Can an FHA streamline refinance work with 10% equity?

Yes. Many FHA streamline refinances don’t require an appraisal, making equity less important. However, some lenders do require an appraisal, but 10% equity isn’t usually an obstacle.

5. Does LTV affect my refinance rate?

Yes — higher LTV = higher risk = higher pricing adjustments in some cases.

6. What if my appraisal comes in low?

Your refinance may be denied unless you pay down your loan or switch to a more flexible program (FHA/VA).

Bottom Line

Refinancing with 10% equity may be possible — especially with FHA or certain conventional programs — but pricing may be higher, and PMI will remain. Your appraisal, credit score, and DTI play an outsized role at this LTV tier.

Because lenders price 90% LTV loans very differently, the smartest step you can take is to compare your offer against others before you commit.

👉 Before you lock a 90% LTV refinance, make sure the pricing is actually competitive. Upload your Loan Estimate to Fincast and see whether vetted lenders can beat it. There’s no spam and no extra credit pull.

• This blog is for educational purposes only and not financial or legal advice. Consult with a licensed mortgage professional for personalized guidance.