Rate and Term Refinance
Why Choose a Rate and Term Refinance
Designed for homeowners who want to lower their interest rate, adjust their loan term, or improve their long-term mortgage strategy without taking cash out of their home.
Lower Your Mortgage Payment*
Reducing your interest rate, extending your loan term, or both, may help create meaningful monthly savings.
Build Equity More Quickly
Refinancing into a shorter term may help you pay down principal faster and reduce total interest paid over the life of the loan.
Lock in Predictability
Many homeowners use a rate and term refinance to move from an adjustable-rate mortgage into a fixed-rate loan.
How a Rate and Term Refinance Works
Rate
Replace your existing mortgage rate with a new one based on current market conditions and borrower qualifications.
Term
Move to a shorter term or extend your repayment timeline.
Loan Balance
Unlike a cash-out refinance, the primary goal is to adjust your rate, the loan term or both, rather than borrowing equity.
Monthly Payment
Lower your monthly payment* or build equity faster – depending on your financial goals.
The Breakdown
80%
Typical LTV
620+
Credit Score
≤45%
Debt-to-Income Ratio
Run the Numbers
Calculate Your Refinance Break-Even Point
Estimate Your New Payment
See What You Could Save
Answer a few quick questions and we'll show refinance options, estimated rates, and potential monthly savings*.
Have Questions About Refinancing?
Let us help answer your questions and discuss options based on your goals.
Frequently Asked Questions
What is a rate and term refinance?
A rate and term refinance is essentially a new mortgage with a new interest rate, a new term, or both, while your principal balance generally stays the same. It is often used to lower monthly payments or, alternatively, to build equity faster.
What's the difference between a rate and term refinance and a cash-out refinance?
A rate and term refinance changes your interest rate, your loan terms, or both, using your existing loan balance. A cash-out refinance increases your loan balance because a portion of the refinanced loan is given to you as cash when the loan funds. The amount you receive is based on your home’s equity.
How much does a rate and term refinance cost?
Your loan officer will provide you with an itemized Loan Estimate that provides a complete breakdown of all of the costs associated with the loan refinance. These can include appraisal, title and recording fees as well as escrow-related charges.
How long does a rate and term refinance take?
The refinance process timing can vary based on factors such as documentation requirements, appraisal needs, and underwriting review. Your Loan Officer can discuss the process and the requirements specific to your situation.
Are FHA loans eligible for a rate and term refinance?
Yes. FHA borrowers are eligible for rate and term refinances.
Can I switch from an adjustable-rate mortgage to a fixed-rate mortgage?
Yes. One of the most common uses of a rate and term refinance is to replace an adjustable-rate mortgage for a fixed-rate mortgage.
Do I need an appraisal for a rate and term refinance?
You may. Your Loan Officer can advise what you will need based on the type of refinance loan you desire.
How do I calculate my break-even point on a refinance?
You can use our handy break-even calculator or you can calculate it by dividing your total closing costs by your expected monthly savings. For example, $9,000 in closing costs divided by $300 in monthly savings yields a breakeven point of 30 months. If you plan to be in the home beyond that timeframe, a refinance may justify the expense.
Can I refinance a 30-year fixed-rate mortgage to a 15-year fixed-rate mortgage?
Yes. A rate and term refinance enables you to make this change. To note, a shorter loan term will most likely increase your monthly payment, but it also can reduce the amount of interest paid over the life of the loan, if you keep the loan for the full term. Consider your budget and financial goals before selecting a shorter term.