What is a rate and term refinance?

A rate and term refinance is a loan improvement. You exchange your old mortgage for a new one that (hopefully) leaves you in a better financial position. You may be able to accomplish one or more goals with a rate and term refinance, such as: Lowering your monthly payment. Reducing the amount of interest you pay over the long term.

Is a rate and term refinance a good idea?

A rate and term refinance may be beneficial to borrowers in several ways: Lower monthly payments: Rate and term refinances can help you lower your monthly payments, potentially freeing up finances for other life expenses and goals. Be aware that this may lead to paying more interest over time.

Can a rate and term refinance lower my mortgage rate?

A rate and term refinance can lower your mortgage rate or reduce or extend the time you'll be paying off your loan. Some or all of the mortgage lenders featured on our site are advertising partners of NerdWallet, but this does not influence our evaluations, lender star ratings or the order in which lenders are listed on the page.