Lower your rate. Shorten your term. No cash out.
The cleanest refinance — replace your existing mortgage with a better one. Works across conventional, FHA, VA, and USDA loans.
How it works
- Replaces your existing mortgage with a new loan at a better rate or different term
- No cash taken out — incidental cash back capped at $2,000
- Works across conventional, FHA, VA, and USDA loans
- Typical close: 3–4 weeks from application
When it makes sense
- Current rates are 0.5%+ below your existing rate
- You've reached 80% LTV and want to remove PMI
- Shortening a 30-year to a 15- or 20-year payoff
- Switching from an ARM to a fixed rate before reset
Requirements
- 620+ credit score (conventional); lower allowed on FHA/VA
- Sufficient equity for the program (typically 5–20%)
- Current on your mortgage — no 30-day lates recently
- Stable income and DTI within program limits
Pros & cons
Pros
- Lower monthly payment
- Lower interest cost over the life of the loan
- Option to drop PMI
- Lock a fixed rate ahead of an ARM reset
Cons
- Closing costs typically 2–4% of loan amount
- Resets your loan clock if you extend the term
- Appraisal usually required
- Doesn't make sense if you'll sell before break-even
Who it's best for
- Homeowners with a clear rate-improvement opportunity
- Borrowers near 80% LTV who can drop PMI
- Owners planning to stay 3+ years past break-even
- ARM holders nearing their adjustment date
FAQs
How much can I save with a rate-and-term refi?+
Savings depend on rate drop and loan balance. As a rule of thumb, every 0.5% rate reduction on a $400,000 loan saves about $120/month. Calculate your break-even by dividing total closing costs by monthly savings — if you'll stay past break-even, refinancing wins.
Do I need an appraisal?+
Usually yes on a conventional rate-and-term refi. Some scenarios qualify for an appraisal waiver (Property Inspection Waiver) through Fannie Mae or Freddie Mac when there's strong equity and clean property data. FHA Streamline and VA IRRRL refis skip the appraisal entirely.
How long does it take to close?+
Most rate-and-term refis close in 21–30 days. Files with appraisal waivers can close faster — sometimes in 2 weeks.
What's the break-even calculation?+
Break-even (months) = total closing costs ÷ monthly savings. If your closing costs are $4,000 and you save $200/month, your break-even is 20 months. Plan to keep the loan well past break-even for the refi to make sense.
Can I roll closing costs into the new loan?+
Yes — most rate-and-term refis allow you to finance closing costs into the loan balance, so you can close with $0 out of pocket. Doing so reduces your effective break-even because you're not paying costs upfront.
Get a real refinance quote
Soft credit pull, no obligation — usually same day.