Mortgage insurance is a cost that needs to be eliminated ASAP, at least in my mind. You say it will take three years of normal payments to rid yourself of it - 1429 X 3 = $4,287. Plus that is $10k put towards principle that you are no longer paying off interest on, so say you have a 30 year loan @ 4% - that means $400 more per year going towards the principle for the remainder of your mortgage.

The first three years you will see the best return - ~18.29% each year (1429 from insurance and 400 from less interest). Followed by a compounding 4% return until you close out your loan, which will end earlier than normal - another benefit.

$10,000 compounded monthly at 4% for 21 years would be $23,131.

So your $10,000 will give you a guaranteed return of $17,418 over the course of the 21 years remaining on your mortgage. ($23,131 + 4287 - your initial $10k investment)

Basically, with everything included it would be a guaranteed return of just under 5% on average over 21 years.

I would do it, but I am very against mortgage insurance and I don't like paying interest either.