01
Review Your Current Mortgage
Start by reviewing your existing interest rate, remaining loan balance, monthly principal and interest payment, and years left on your mortgage.
RATE & TERM MORTGAGE REFINANCING
Change Your Mortgage Terms. Create New Possibilities.
Your mortgage should support your financial goals. Explore how a rate and term refinance may help you adjust your interest rate, change your repayment period, or transition to a different mortgage structure.
Explore Payment Options
Compare Loan Terms
Personalized Guidance
Refinancing may involve closing costs and changes to total interest paid. Available terms and eligibility depend on applicable lending requirements.
A Mortgage That Fits Your Future
Explore refinancing options that align with your financial priorities.
UNDERSTANDING RATE & TERM REFINANCING
How Does Rate & Term Refinancing Work?
A rate and term refinance replaces your existing mortgage with a new home loan. Depending on eligibility and available programs, homeowners may adjust their interest rate, repayment term, or mortgage structure without taking substantial cash out.
02
Explore New Loan Terms
Compare potential interest rates, repayment periods, fixed or adjustable rate structures, and applicable closing costs to understand your options.
03
Replace Your Existing Loan
If approved, the new refinance loan pays off your existing mortgage. You then begin making payments according to the new loan terms.
What’s the Difference Between Rate & Term and Cash-Out Refinancing?
Rate and term refinancing generally focuses on changing your existing mortgage terms without accessing substantial equity in cash. A cash-out refinance allows eligible homeowners to borrow additional funds against available home equity.
Small Changes in Mortgage Terms Can Make a Difference
Refinancing may change your monthly mortgage payment, but the financial impact depends on more than the interest rate alone.
- Compare the current and proposed interest rates.
- Consider how many years remain on your existing loan.
- Review the proposed new repayment term.
- Understand closing costs and financing fees.
- Evaluate total interest over the remaining loan periods.
Illustrative Mortgage Example
Remaining Mortgage Balance
$250,000
Current Interest Rate
7.00%
Remaining Mortgage Term
25 Years
Illustrative New Interest Rate
6.00%
Illustrative New Loan Term
25 Years
Illustrative Monthly Principal & Interest Difference
About $163 Lower
Hypothetical example only. Assumes the same $250,000 principal balance and a fully amortizing fixed-rate loan over 25 years. Excludes closing costs, taxes, insurance, mortgage insurance, and other fees. Not an actual rate quote or guarantee of savings.
INTERACTIVE REFINANCE COMPARISON CALCULATOR
Could Changing Your Mortgage Terms Make a Difference?
Compare your current remaining mortgage against a proposed rate and term refinance. Explore payment differences, interest, closing costs, and break-even estimates.
Your Mortgage Details
Adjust the six sliders to compare scenarios.
$25K$1.5M
1%15%
1 year30 years
1%15%
5 years30 years
$0$30K
Your Refinance Comparison
Illustrative principal and interest estimates.
Current Monthly Payment
Calculating…
Estimated New Monthly Payment
Calculating…
Estimated Monthly Payment Difference
Calculating…
Current Remaining Interest
Calculating…
Estimated New Loan Interest
Calculating…
Estimated Closing Costs
$5,000
Interest Difference Before Costs
Calculating…
Simple Break-Even Estimate
Calculating…
Adjust the sliders to compare your options.
Discuss My Refinance Options →Educational estimates only, not a rate quote or financing approval. Assumes fixed-rate, fully amortizing loans, with the same principal balance and closing costs paid separately. Excludes taxes, insurance, mortgage insurance, and other expenses. Simple break-even calculations do not account for the time value of money. Actual terms and costs may vary.
EXPLORE YOUR REFINANCE POSSIBILITIES
Why Do Homeowners Choose Rate & Term Refinancing?
Rate and term refinancing may help eligible homeowners adjust their mortgage structure to better align with their financial goals. Explore some common reasons homeowners consider refinancing.
Explore a Different Interest Rate
Refinancing may provide an opportunity to obtain a different mortgage rate, depending on market conditions, qualification, and available programs. A lower rate is not guaranteed.
Adjust Your Monthly Payment
Changing your interest rate or repayment term may affect your monthly principal and interest payment. Consider total borrowing costs alongside payment changes.
Shorten Your Mortgage Term
A shorter repayment period may help you pay off your mortgage sooner and reduce total interest, although monthly payments may increase.
Change Your Loan Structure
Some homeowners refinance to move between adjustable-rate and fixed-rate mortgage structures. Available options depend on program eligibility.
Review Mortgage Insurance
Refinancing may change applicable mortgage insurance requirements, depending on your existing loan, property equity, and the new financing program.
Align Your Mortgage With Your Goals
Whether you’re planning for retirement, managing household expenses, or reviewing long-term finances, refinancing may offer a different repayment structure.
Wondering If Refinancing Makes Sense for You?
Compare your existing mortgage with an illustrative new loan using our interactive calculator.
UNDERSTAND YOUR REFINANCE OPTIONS
Rate & Term Refinance vs. Cash-Out Refinance
Both options replace your existing mortgage, but they serve different financial goals. Understanding the differences can help you choose the refinancing strategy that fits your circumstances.
OPTION 01
Rate & Term Refinance
A rate and term refinance focuses on adjusting your existing mortgage interest rate, repayment period, or loan structure without substantial cash-out.
- Replaces your current mortgage.
- May change your interest rate.
- Can shorten or extend your loan term.
- May change fixed or adjustable rate structures.
- Generally does not provide substantial cash proceeds.
- May involve closing costs and fees.
OPTION 02
Cash-Out Refinance
A cash-out refinance replaces your existing mortgage with a larger home loan, allowing eligible homeowners to access a portion of available equity.
- Replaces your current mortgage.
- May provide cash proceeds at closing.
- Generally increases your mortgage balance.
- Can be used for eligible financial goals.
- Subject to equity and loan-to-value requirements.
- May involve closing costs and fees.
Which Refinance Strategy May Fit Your Needs?
Choosing between rate and term refinancing and cash-out refinancing involves more than comparing interest rates. Consider your complete financial picture.
- Determine whether you need additional cash.
- Compare current and proposed mortgage payments.
- Review interest rates and repayment terms.
- Consider closing costs and total interest.
- Evaluate how refinancing affects home equity.
- Review qualification and program requirements.
What If You Want to Keep Your First Mortgage?
If you have favorable existing mortgage terms, replacing your first mortgage may not be your preferred option.
A Home Equity Line of Credit may allow eligible homeowners to access available equity while keeping their existing first mortgage in place.
The iLoan team can help you compare available refinancing and home equity financing options.
Speak With an iLoan Consultant →
All loan programs are subject
to applicable underwriting
requirements and approval.
Borrowing against your home
involves financial risk.
UNDERSTANDING REFINANCE ELIGIBILITY
What Do You Need to Qualify for Rate & Term Refinancing?
Refinancing requirements depend on your existing mortgage, financial profile, property, and the loan program you select. Understanding the factors commonly reviewed can help you prepare.
Credit Score & History
Lenders evaluate credit history, payment patterns, and other credit factors. Minimum requirements depend on the selected mortgage program and lender guidelines.
Income & Employment
Qualifying income, employment history, and documentation may be reviewed to determine your ability to repay the proposed loan. Requirements vary by program.
Debt-to-Income Ratio
Your debt-to-income ratio compares qualifying monthly debt obligations with gross monthly income. Acceptable ratios vary by program and underwriting requirements.
Property Value & Equity
Your home’s value and outstanding mortgage balances affect your loan-to-value ratio. Some refinance programs offer different valuation or equity requirements.
Mortgage Payment History
Your current mortgage payment history may affect qualification. Certain programs have specific requirements for recent payments and loan seasoning.
Loan & Property Eligibility
Property type, occupancy, existing loan program, and proposed mortgage terms may influence which refinance options are available.
Documents to Prepare for Rate & Term Refinancing
Having key mortgage and financial information available can help you explore your refinancing options. Documentation requirements vary by loan program.
- Current mortgage statement and loan balance.
- Existing mortgage interest rate and remaining term.
- Income and employment documentation.
- Recent bank or asset statements when required.
- Homeowners insurance and property tax information.
- Additional property or mortgage records when requested.
Not Sure If You Qualify?
The iLoan mortgage team can help you review your existing mortgage, financial circumstances, and potential refinance programs to understand which options may be available.
Discuss My Refinance Options →
Loan availability and eligibility
depend on applicable underwriting
guidelines and approval.
Refinancing may involve closing costs
and changes to total interest paid.
UNDERSTAND YOUR REFINANCE COSTS
Understanding Rate & Term Refinance Closing Costs
Refinancing replaces your existing mortgage with a new loan, and the process may involve closing expenses. Understanding these costs can help you evaluate the financial benefits and tradeoffs of refinancing.
Lender Fees & Loan Charges
Depending on the lender and loan program, expenses may include origination fees, underwriting charges, and discount points if selected. Review your Loan Estimate for applicable costs.
Appraisal & Property Costs
Some refinancing programs require an appraisal or other property valuation. Requirements vary based on the mortgage program, property, and lender.
Title & Settlement Services
Closing costs may include title searches, lender’s title insurance, recording fees, settlement services, and other applicable third-party expenses.
Prepaid Items & Escrow Funding
Closing documents may include prepaid interest, property taxes, homeowners insurance, or initial escrow deposits. These amounts differ from lender and settlement charges.
What Is the Break-Even Point on a Refinance?
A simple refinance break-even estimate divides applicable closing costs by estimated monthly payment savings. For example, $4,000 in costs divided by $100 in monthly savings equals approximately 40 months. This simplified approach does not account for differences in principal repayment, loan terms, or the time value of money. Try our Rate & Term Refinance Calculator to explore illustrative scenarios.
6 Common Rate & Term Refinancing Mistakes to Avoid
Refinancing can offer financial flexibility, but choosing a new mortgage involves important tradeoffs. Consider these common mistakes before proceeding.
01
Focusing Only on the Interest Rate
A lower rate does not automatically mean a better mortgage. Compare APR, fees, payments, and total costs.
02
Ignoring the Break-Even Timeline
Consider how long it may take for monthly payment differences to offset applicable refinance costs, especially if you plan to move.
03
Restarting a Longer Loan Term
Extending repayment may lower monthly payments but increase total interest over time.
04
Overlooking Mortgage Insurance
Refinancing may change mortgage insurance requirements. Understand how applicable premiums affect your complete housing payment.
05
Not Comparing Loan Estimates
Review complete Loan Estimates to understand proposed rates, closing costs, and financing terms before selecting an offer.
06
Assuming a Lower Payment Means Savings
A lower monthly payment may result from a longer term rather than reduced total borrowing costs. Compare lifetime interest as well.
Want to Compare Your Mortgage Numbers?
Use our interactive calculator to explore monthly payment differences, remaining interest, and estimated refinancing costs.
RATE & TERM REFINANCE QUESTIONS ANSWERED
Rate & Term Refinance Frequently Asked Questions
Learn how rate and term refinancing works, what may affect your eligibility, and how to evaluate new mortgage terms before making a decision.
What is a rate and term refinance?
A rate and term refinance replaces your existing mortgage with a new loan, generally to change the interest rate, repayment term, or loan structure without substantial cash-out.
Can I refinance my mortgage to get a lower interest rate?
Potentially. Your available interest rate depends on market conditions, credit profile, property details, loan program, and other factors. A lower rate is not guaranteed.
Use our Rate & Term Refinance Calculator to explore illustrative scenarios.
Can I refinance from a 30-year mortgage to a 15-year mortgage?
Yes, if you qualify for the new loan. Shortening your repayment term may reduce total interest and help you pay off your home sooner, although monthly payments may increase.
Does rate and term refinancing require home equity?
Equity and loan-to-value requirements vary by program. Some refinance options have different equity requirements or may offer streamlined qualification for eligible borrowers.
How much does a rate and term refinance cost?
Costs depend on the loan program, lender, property, and transaction. Expenses may include lender charges, appraisal costs, title services, prepaid items, and other applicable closing expenses.
Review your Loan Estimate and compare costs against potential refinancing benefits.
Can I switch from an adjustable-rate mortgage to a fixed-rate mortgage?
Potentially. Eligible homeowners may refinance an adjustable-rate mortgage into a fixed-rate loan. A fixed rate generally provides more predictable principal and interest payments.
Will refinancing restart my mortgage term?
A refinance creates a new loan with its own repayment schedule. You may be able to choose a term that is shorter, similar to, or longer than the remaining term on your existing mortgage.
Does refinancing affect my credit score?
A refinance application may involve a hard credit inquiry. Opening a new mortgage and closing the previous loan can also affect your credit profile. The impact varies by individual.
How long does rate and term refinancing take?
The timeline depends on documentation, underwriting, appraisal requirements, title review, and closing. Streamlined programs may have different requirements.
When does it make sense to refinance my mortgage?
Refinancing may make sense when the available terms support your financial goals after considering closing costs, monthly payments, total interest, and how long you expect to keep the mortgage.
Compare your options with our interactive refinance calculator or speak with an iLoan consultant.
Still Have Questions About Rate & Term Refinancing?
Connect with the iLoan mortgage team to review your existing loan and explore potential refinancing options.
PERSONALIZED MORTGAGE REFINANCE GUIDANCE
Explore Your Rate & Term Refinance Options With iLoan
Ready to review your existing mortgage and explore potential refinancing opportunities? Connect with the iLoan mortgage team to compare available loan programs and understand your next steps.
Let’s Find a Mortgage Strategy That Fits Your Goals.
Whether you’re exploring a different interest rate, adjusting your repayment term, or changing your loan structure, our mortgage professionals can help you understand available refinancing options and the financial considerations.
✓
Review Your Existing Mortgage
Discuss your current interest rate, remaining loan balance, monthly payment, and repayment term.
✓
Compare Available Refinance Programs
Explore potential loan terms and financing structures based on your circumstances and applicable qualification requirements.
✓
Understand Your Next Steps
Learn about qualification, documentation, closing costs, and the refinancing process.
Prefer to speak with us directly?
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Request Your Rate & Term Refinance Consultation
Complete the form below and an iLoan team member can help you explore available mortgage refinancing options.
iLoan LLC · NMLS #1947845.
Loan options are subject to applicable
underwriting requirements and approval.
Submitting an inquiry does not constitute
a loan application or guarantee financing.
Refinancing may involve closing costs
and changes to total interest paid.
