A rate-and-term refinance replaces your loan to get a better interest rate, a different term, or both. Unlike a cash-out refinance, you are not pulling equity out, just improving the loan itself.
Two main goals
- Lower your rate to reduce your monthly payment and total interest
- Change your term, such as moving from a 30-year to a 15-year loan
Why shorten your term
Moving to a shorter term usually means a higher monthly payment but far less interest paid overall, and you own your home outright much sooner. If rates have dropped, you can sometimes shorten the term with little change to the payment.
Switching off an adjustable rate
If you have an adjustable-rate mortgage, a rate-and-term refinance into a fixed rate locks in predictability and protects you from future rate increases.
Even without taking cash out, the right rate-and-term refinance can save thousands. Run the numbers with us before rates move again.