Rate-and-Term Refinance

Refinancing to lower the rate or change the term, without taking cash out. Lower closing costs than cash-out.

A rate-and-term refinance pays off your existing mortgage with a new one, with the goal of lowering the rate, changing the term (e.g., 30-year to 15-year), or both. No cash is taken out beyond closing-cost reimbursements. Higher LTV is allowed compared to cash-out refinance (90-95% on most programs vs. 80% cash-out). Most common reason: rate environment improved since your original loan.