Reviewed by Jeff Shin, NMLS #1041652. Updated .

Types of refinance

  • Rate-and-term refinance. A new loan at a different rate, a different term, or both. No cash comes out.
  • Cash-out refinance. A larger new loan that pays off the current one and gives you the difference in cash. Fannie Mae caps a conventional cash-out on a one-unit primary home at 80% of its value. See what a cash-out refinance does to your payment.
  • Streamline refinance. If your loan is FHA or VA, the FHA streamline and the VA IRRRL cut the paperwork and usually skip the appraisal.
  • Keep the first mortgage. If your current rate is low, a HELOC or home equity loan can raise cash without replacing it.

Refinance rates today

Refinance rates follow the same market as purchase rates, but the structure changes the price. Cash-out refinances carry extra pricing adjustments under the Fannie Mae and Freddie Mac grids, and points or lender credits move the rate in either direction. Start with the weekly 30-year and 15-year benchmark, then compare refinance quotes on the same loan amount, the same points, and the same lock period.

Does refinancing pay? The break-even

Divide the total cost of the refinance by the monthly savings. The answer is the number of months before the refinance pays for itself. If you will sell or refinance again before then, it loses money. Measure the savings against what is left on your current loan, not against a fresh 30 years. Run it in the refinance break-even calculator, or read does refinancing actually pay and how many months it takes to recover closing costs.

No-closing-cost refinance

A no-closing-cost refinance does not make the costs disappear. They are either paid by a lender credit, which means a higher rate, or rolled into the new loan balance. It can make sense if you expect to move or refinance again within a few years. Compare the two versions side by side: lender credit vs. lower rate.

Questions borrowers ask

When does it make sense to refinance a mortgage?

Refinancing makes sense when the monthly savings recover the closing costs before you expect to sell or refinance again. Divide the total refinance cost by the monthly savings to find the break-even month.

What is the difference between a rate-and-term and a cash-out refinance?

A rate-and-term refinance changes the rate, the term, or both, with no cash out. A cash-out refinance takes a larger loan and pays you the difference. Cash-out loans usually price higher and have lower loan-to-value limits.

How much can I take out with a cash-out refinance?

For a conventional loan on a one-unit primary home, Fannie Mae caps a cash-out refinance at 80% of the home’s value. FHA also caps cash-out at 80% under HUD rules. VA rules allow more, though many lenders set a lower cap.

Is a no-closing-cost refinance really free?

No. The costs are covered by a higher rate through a lender credit, or added to the loan balance. It can still be the better choice if you will keep the loan for only a few years.

Are refinance rates higher than purchase rates?

A rate-and-term refinance often prices close to a purchase loan. Cash-out refinances usually carry extra pricing adjustments, so they tend to price higher for the same borrower.

Sources

Program rules on this page are summarized from the agencies that set them. Lenders can add stricter requirements. Checked October 7, 2026.

Related

Refinance by city: all 33 markets

Every page in this section, not a selected eight — a hub that links a quarter of its own children is a hub that hides the other three quarters.

Pages marked not licensed cover markets outside the licensed footprint. They are educational only. Jeff Shin is licensed to originate residential mortgage loans in Illinois, Indiana, Kansas, Michigan, New Jersey, Texas.

Other loan products

Not sure which of these applies to you?

That is usually the actual question. Send the situation rather than the product name — purchase or refinance, primary or investment, price range, and timeline — and you get the structures that fit, with what each one costs.

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