Refinancing may lower your monthly payment, reduce your interest rate, remove PMI, or help you switch loan programs — but what if you only have 15% equity? Is refinancing still possible? And is it a good idea?

Short answer:

Yes, you may be able to refinance with 15% equity (85% LTV), and your options widen compared to 5–10% equity scenarios. Conventional, FHA, and VA refinances are all possible. However, PMI is still required on conventional refinances, and many lenders apply noticeable pricing adjustments at 85% LTV. Your credit score, DTI, and appraisal play an important role in approval and pricing.

This guide explains how to refinance with 15% equity, your rate expectations, PMI rules, and how to strengthen your approval odds — along with how to confirm whether your refinance offer is actually competitive.

Key Takeaways

• You may be eligible to refinance with 15% equity (85% LTV)

• PMI is required for conventional refinances with an LTV above 80%

• 85% LTV pricing is better than 90–95% LTV pricing, but it still often includes risk-based adjustments

• Cash-out refinances are not allowed with only 15% equity for most loans

• Appraisal accuracy is critical, as even a small valuation drop can push you into a more expensive LTV tier

💡 Pro Tip: Pricing can vary significantly between lenders even at the same LTV. Getting offers from multiple lenders and comparing them side by side is the only way to determine if you have a competitive deal.

Can You Refinance With 15% Equity?

Yes — 15% equity is enough to refinance through most major loan programs, but eligibility depends on your borrower profile.

At 85% LTV, you may have enough equity for:

✔ Conventional rate-and-term refinances

✔ FHA refinances

✔ VA refinances (no equity requirement on streamline)

However:

• PMI stays in place for conventional refinances

• Rates may include risk-based adjustments

• Most lenders require solid credit and a manageable DTI

15% equity is a meaningful improvement over 5–10% equity, allowing more favorable pricing, in some cases, but not yet enough to remove PMI or unlock the best rates.

Refinance Options With 15% Equity (85% LTV)

1. Conventional Refinance

Conventional rate-and-term refinances allow up to 95% LTV, so 85% LTV is well within the eligibility range.

You can refinance if:

• You meet the lender’s credit score requirements, often 680–700+

• Your DTI is within lender range, usually ≤ 45%

• Your appraisal supports the value

• You have a stable income and payment history

Limitations:

• PMI remains until you reach 80% LTV

• Pricing adjustments apply at 85% LTV

• You may not receive an appraisal waiver

Benefits vs. 90–95% LTV:

• Lower PMI

• Lower rate adjustments

• Higher approval odds

• Requirements vary by lender and the underwriting method used.

2. FHA Refinance

FHA refinances allow up to 97.75% LTV, depending on the lender’s seasoning requirements, so an 85% LTV fits well within the range.

Pros:

• Lower credit score requirements (often 580+)

• Higher DTI allowances

• Consistent pricing across LTV tiers

• Possible no-appraisal option with FHA Streamline

Cons:

• Mortgage insurance premiums (MIP) required

• MIP may last for the life of the loan, depending on your initial down payment when you bought the home

💡 Pro Tip: For borrowers with borderline credit or a higher DTI, FHA loans may help with eligibility. But don’t get caught up in the hype your first lender offers. Compare quotes from several lenders to ensure you have the most competitive terms.

• Lender requirements vary for FHA loans, so shop around to find the lender whose requirements you meet.

3. VA Refinance

The VA offers a streamlined refinance program for borrowers with a current VA loan, called the VA IRRRL.

VA IRRRL Benefits:

• No equity requirement

• Often no appraisal

• Very fast process

• Exact requirements vary by lender.

VA Cash-Out:

Usually requires leaving 10–20% equity after closing, so 15% equity may or may not qualify, depending on the lender.

4. Jumbo Loans

Jumbo refinancing typically requires:

• 20–30% equity

• Excellent credit (720–760+)

• Lower DTI

• Significant reserves

Many lenders require more than 15% equity to refinance a jumbo loan; however, with compensating factors such as strong credit or a low DTI, there may be exceptions.

How 15% Equity (85% LTV) Affects Your Refinance Pricing

Many lenders consider an 85% LTV in the mid-tier pricing category. It’s better than a 90–95% LTV, but not yet at the “preferred” 80% LTV threshold.

Rate Impact

At 85% LTV, conventional refinances may carry:

• Slightly higher rates due to the higher LTV

• Higher PMI premiums than 75–80% LTV loans

FHA and VA are less sensitive to LTV, but still price risk into certain scenarios.

💡 Pro Tip: Not sure what your qualifications qualify you for? Apply for a refinance with your favorite lender. You’ll receive a Loan Estimate within three business days, which you can use to negotiate with other lenders.

PMI Requirements

Since you have an LTV above 80%, PMI is required for conventional loans.

At 85% LTV:

• PMI is cheaper than at 90–95%

• Removal may be possible once you reach 80% LTV

Closing Requirements

Underwriting at 85% LTV may involve:

• More detailed asset verification

• Reserve requirements

• Slightly higher lender scrutiny

This varies widely across lenders, making comparison important.

💡Pro tip: Unsure whether your 85% LTV pricing is fair? Upload a single Loan Estimate to Fincast to see instantly whether your lender is competitive, without another credit pull.

When Refinancing With 15% Equity Might Not Make Sense

You may want to wait if:

• Your rate improvement is small

• PMI costs reduce monthly savings

• You’re close to hitting 20% equity within months

• You're switching into FHA and adding long-term MIP

• Your break-even point exceeds your expected time in the home

Break-Even = Total Refinance Costs ÷ Monthly Savings

Compare this number carefully before moving forward.

How to Improve Approval Odds at 85% LTV

1. Boost Your Appraisal

Small improvements can help:

• Landscaping

• Fresh paint

• Lighting updates

• Decluttering

• Providing strong comparable sales

Because you’re near the 80% PMI-removal threshold, even a slight value bump can have major benefits.

2. Make a Small Principal Payment

Paying down $3,000–$10,000 could:

• Reduce your LTV

• Lower PMI

• Improve rates

• Bring you closer to 80% LTV

3. Strengthen Your Credit

A 20–40 point improvement can meaningfully reduce pricing.

Focus on:

• Lowering credit card balances

• Avoiding new inquiries

• Removing errors

• Paying on time

4. Reduce Your DTI

Improve DTI by:

• Paying off high-interest loans

• Increasing documented income

• Adding a co-borrower

Lenders tighten DTI standards at higher LTV.

5. Choose the Best Loan Program for Your Situation

• FHA if credit/DTI needs flexibility

• VA if eligible

• Conventional if near 80% LTV

Alternatives If You Can’t Refinance Yet

If refinancing isn’t ideal at 15% equity, consider:

✔ Waiting and building equity

✔ Making a one-time principal paydown

✔ Switching to FHA or VA (if eligible)

✔ Improving your appraisal readiness

How Fincast Can Help

At 85% LTV, lenders price risk very differently. Two borrowers with the same credit, income, and equity can receive offers that differ by thousands of dollars simply because lenders structure pricing adjustments differently.

Fincast shows you in plain English whether your refinance offer is actually competitive or quietly overpriced.

Here’s how Fincast works:

1. Upload your Loan Estimate

2. Fincast analyzes your offer

3. Vetted lenders compete to beat your offer

4. You choose the best deal

For mid-range LTV scenarios, such as 85%, benchmarking is especially important because pricing can vary so much.

FAQs: Refinancing With 15% Equity

1. Can I refinance with 15% equity?

Yes — conventional, FHA, and VA refinances all allow it, but you must meet the requirements to qualify.

2. Do I need PMI at 85% LTV?

Yes. PMI is required for conventional refinances with an LTV above 80%.

3. Can I do a cash-out refinance with 15% equity?

No. Most lenders require 20–25% equity after closing for a cash-out refinance.

4. How does 15% equity affect my refinance rate?

Every lender prices differently, but rates may include modest risk-based adjustments, depending on your borrower profile.

5. What if my appraisal comes in low?

You may need to:

• Pay down the loan

• Reduce the loan amount

• Switch loan programs

• Delay refinancing

6. When can I remove PMI?

Once your LTV reaches 80%, either through appreciation or loan paydown.

Bottom Line

Yes — refinancing with 15% equity can be possible. You may qualify for most major loan programs, though PMI remains, and rates may include some high-LTV adjustments. With strong credit, stable income, and a solid appraisal, you can still secure a competitive refinance.

Because lenders structure 85% LTV pricing very differently, the smartest step you can take is to benchmark your offer before committing.

👉 Before you lock an 85% 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.