Rate-and-Term Refinance Refinancing to change your rate or term without pulling out cash

A rate-and-term refinance replaces your existing mortgage with a new loan that changes the interest rate, the loan term, or both — without taking out additional cash. Unlike a cash-out refinance, you don't receive significant money back at closing; the goal is to improve your loan structure rather than tap your equity. Borrowers typically use this to lower their interest rate, switch from an adjustable to a fixed rate, or shorten the term to pay off the home faster. Lowering your rate can reduce your monthly payment, while shortening the term often raises the payment but saves on total interest. Closing costs, your credit profile, and current market rates all affect whether the move makes sense. Because no meaningful cash changes hands, qualifying standards and available terms often differ from a cash-out refinance.