Rate-and-Term Refinance Explained
What Is a Rate-and-Term Refinance?
A rate-and-term refinance replaces your existing mortgage with a new one that has a different interest rate, loan term, or both. It does not provide cash back and is used mainly to improve monthly payments or shorten the payoff timeline.
Who Benefits From a Rate-and-Term Refinance?
Homeowners often choose this refinance when interest rates drop, their credit improves, or they want to switch from an adjustable-rate mortgage to a fixed-rate loan for stability.
Common Reasons to Choose This Option
Borrowers use rate-and-term refinances to lower monthly payments, reduce total interest costs, shorten the loan term, or remove mortgage insurance when eligible.
How to Know If It’s a Good Fit
Comparing your current rate, remaining loan term, and long-term goals helps determine whether a rate-and-term refinance will save you money or improve your financial position.
See If a Rate-and-Term Refinance Makes Sense
Review your current loan details and compare potential savings to decide if this refinance option supports your goals.
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