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Rate-and-Term Refinance
A rate-and-term refinance replaces your current mortgage with a new loan that lowers your rate, shortens your term, or both, without taking cash out of your equity. Work directly with a broker who shops wholesale lenders for you.
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What is a rate-and-term refinance?
A rate-and-term refinance pays off your current mortgage and replaces it with a new loan that has a different interest rate, a different term, or both, while keeping your loan balance close to what you owe today. Unlike a cash-out refinance, you are not pulling equity out as cash. The point is a cleaner loan structure, whether that means a lower monthly payment, a shorter path to a paid-off home, or moving off an adjustable rate into a fixed one.
Your goal
When does a rate-and-term refinance make sense?
Pick the goal that sounds like yours. A rate-and-term refinance is built to do one of these jobs.
Lower your monthly payment
If rates or your credit have improved since you closed, a new rate can free up real monthly cash flow.
Shorten your term
Moving to a shorter term can save substantial interest over the life of the loan and get you to a paid-off home faster.
Drop mortgage insurance
If your equity has grown enough, refinancing may let you remove PMI and lower your total payment.
Leave an adjustable rate
Lock predictable payments by moving off an ARM into a fixed rate before an adjustable rate moves against you.
Stabilize your budget
Trade an unpredictable payment for one you can plan around for the years you intend to keep the home.
The honest test
How do I know if it is worth it?
A rate-and-term refinance is worth it when your savings beat your costs before you would realistically sell or pay off the home. Find your break-even point: divide what the refinance costs by how much you save each month, and that is how many months it takes to come out ahead. If you will keep the loan well past that point, it usually makes sense. We run this math with you, in writing, with no credit pull required to get started.
Lower the payment
A meaningful drop in your rate can free up real monthly cash flow.
Shorten the term
Moving to a shorter term can save substantial interest over the life of the loan.
Stop an ARM reset
Lock predictable payments before an adjustable rate moves against you.
Know the difference
Rate-and-term vs. cash-out refinance
Both replace your mortgage, but they answer different questions. A rate-and-term refinance restructures your loan; a cash-out refinance turns equity into cash.
| What you get | Rate-and-term refinance | Cash-out refinance |
|---|---|---|
| Goal | Lower rate or shorter term | Turn equity into cash |
| Cash to you at closing | None beyond minor adjustments | A lump sum from equity |
| Effect on loan balance | Stays close to current | Increases by the cash taken |
| Typical use | Better payment or payoff | Renovations, debt payoff, goals |
| Lenders shopped | Many wholesale lenders | Many wholesale lenders |
How it works
What does the rate-and-term process look like?
Four steps, and a human guides you through every one.
See your numbers
We review your goal and run the break-even math, no credit pull to start.
Shop wholesale
As a broker, we compare multiple wholesale lenders to find your fit.
Lock & underwrite
Lock your terms and we handle the paperwork with common-sense underwriting.
Close on your time
Sign, fund, and start saving, often without leaving your home.
Keep reading
Related refinance reading
Rate-and-Term vs Cash-Out
See which refinance fits your goal.
Learn more →15-Year vs 30-Year
Compare term lengths and payoff speed.
Learn more →Fixed vs ARM Refinance
Weigh rate stability against flexibility.
Learn more →Refinance Calculator
Estimate your closing costs, no credit pull.
Learn more →When to Refinance
Know the right time to make a move.
Learn more →Refinance by State
Find program details where you live.
Learn more →Questions
Rate-and-term refinance FAQ
What is a rate-and-term refinance?
A rate-and-term refinance replaces your existing mortgage with a new one that changes your interest rate, your loan term, or both, without taking additional cash out of your home equity. The goal is a better-structured loan, such as a lower payment or a faster payoff.
How is a rate-and-term refinance different from a cash-out refinance?
A rate-and-term refinance only adjusts your rate or term and rolls in normal closing costs, so your loan balance stays close to what you owe today. A cash-out refinance increases your loan balance to convert equity into cash. If your goal is cash, see our cash-out refinance page.
Can a rate-and-term refinance remove mortgage insurance?
It can in some cases. If your home has gained enough equity, refinancing into a conventional loan may let you drop private mortgage insurance, which lowers your total monthly payment. We review whether your equity position supports this before you apply.
Will a rate-and-term refinance reset my loan term?
It can, but it does not have to. You can refinance into a shorter term to pay off the home faster, keep a similar term, or choose a term that fits your budget. We walk through the trade-offs so the new term matches your goal.
How do I know if a rate-and-term refinance is worth it?
Find your break-even point by dividing the cost of the refinance by the amount you save each month. If you plan to keep the loan well past that point, a rate-and-term refinance usually makes sense. We put this math in writing with no credit pull to get started.
Do I need a new appraisal for a rate-and-term refinance?
Often yes, since the lender confirms current value, though some loan programs allow appraisal waivers. We tell you what your specific program requires before you spend a dollar.
Ready to see if a rate-and-term refinance saves you money?
Start your refinance online in minutes, or book a quick call. No credit pull to get your numbers.