Rate-and-Term Refinance
Replace your current mortgage with a new one at a better rate, a shorter term, or both — without pulling equity out. The math only works if the savings outweigh the cost, so let's find out honestly whether it does.
Understanding rate-and-term refinancing, before you apply.
Six things worth knowing up front — no fine print you have to dig for.
What It Actually Changes
You're replacing your current mortgage with a new one — adjusting the rate, the term, or both. Your loan balance stays roughly the same (aside from any closing costs rolled in), not larger.
Common Reasons People Do This
Lowering a rate, shortening a 30-year term to 15, switching from an adjustable rate to a fixed one, or refinancing out of FHA mortgage insurance into a conventional loan are the most common motivations.
Limited Cash Back
This isn't a cash-out transaction — most programs cap how much cash you can receive at closing (commonly a small amount, like $2,000), just to cover minor overages, not to access equity.
Qualifying Looks a Lot Like a Purchase
Credit, income, and an appraisal are typically required, similar to buying a home — this isn't usually a streamlined process (the IRRRL, covered separately, is the exception for existing VA loans).
Closing Costs Are Real
Expect closing costs in a similar range to a purchase loan — typically a percentage of your loan amount. Whether the refinance is worth it depends on how those costs compare to your monthly savings.
The Math Depends on How Long You'll Stay
If you'll move or refinance again before you recoup the closing costs through monthly savings, the refinance may not actually pay off. This is exactly what the calculator below helps you see.
Refinance Break-Even Calculator
Enter your current loan details and what you're considering refinancing into. This shows your monthly savings and how many months it takes to recoup the closing costs — the real test of whether it's worth it.
What Changes
Estimate only, principal & interest only — doesn't include taxes, insurance, or how a longer term can increase total interest paid over time. I'll walk through the full picture together.
Rate-and-Term Refinance Myths vs. Facts
Common misconceptions about refinancing, corrected one at a time.
Myth: Refinancing always saves you money
If a lower rate is available, refinancing is automatically the right move.
It only makes sense if your monthly savings outweigh the closing costs within the time you actually plan to stay in the home. A lower rate with a longer break-even point than your timeline can end up costing you more, not less.
Myth: A shorter term always means a smaller payment
Switching from a 30-year to a 15-year term lowers your monthly payment, just like getting a better rate does.
A shorter term usually means a higher monthly payment — you're paying off the same balance faster. The trade-off is paying significantly less interest over the life of the loan, not a lower payment today.
Frequently asked, honestly answered.
How much are closing costs on a refinance?
Can I roll closing costs into the new loan?
How soon after buying can I refinance?
Does refinancing hurt my credit?
Let's find out if it's actually worth it.
No pressure, no jargon — just a real conversation about your options.