Rate-and-term refinance
A refinance that changes the rate, the loan length, or both, without pulling cash out. Usually done to lower the payment or shorten the loan.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
A rate-and-term refinance replaces your loan with a cheaper or shorter one and takes no cash out. It is the alternative to selling for a homeowner who wants a lower payment but likes the house.
Part 2 of 4
A simple example
Instead of selling, you refinance $200,000 from 7.2% to 6.1%. The payment drops about $145 a month and the balance stays the same.
| The choice | What changes |
|---|---|
| Rate-and-term refinance | The rate or the term; the balance stays |
| Cash-out refinance | The balance grows and you take the difference |
| Selling | The loan is paid off and the equity becomes cash |
Rate-and-term keeps the house and changes the loan.
Part 3 of 4
What people get wrong
That refinancing is free. Closing costs on a refinance are real, and they are why a small rate drop does not always pay.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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