Rate-and-term
A rate-and-term refinance replaces the existing mortgage with a new one at a different rate, a different term, or both. No cash comes out. It makes sense when pricing has moved, when your credit profile has improved materially since the original loan, or when you want to shorten the term.
Cash-out
A cash-out refinance replaces the mortgage with a larger one and pays the difference to you. Common uses are debt consolidation, improvements, and funding an acquisition. Most lenders cap cash-out at 80% loan-to-value, and cash-out is priced above rate-and-term — you are paying for the equity extraction, not just the new rate.
When it pencils, and when it does not
- Your current note rate is roughly 0.75 percentage points or more above what you would be quoted today.
- You are above 80% loan-to-value and refinancing would remove mortgage insurance.
- You need cash from equity for a defined purpose, and you have priced the alternatives.
- You want to shorten the term — 30-year to 15-year — and can carry the higher payment.
- Break-even on closing costs lands inside the period you expect to keep the loan. If it does not, the refinance loses money no matter how the rate looks.
The number that decides it
Break-even is total closing costs divided by monthly savings. If that comes to 31 months and you expect to sell in two years, the answer is no — regardless of how much better the new rate looks on its own. Resetting a 30-year term also re-front-loads interest, which a monthly-payment comparison hides entirely.
Run the numbers before you talk to anyone
Nothing on this page is a quote. The calculators carry the same assumptions block a Loan Estimate does, so what you see there is comparable to what a lender will hand you.
Should you refinance in Downers Grove?
Send your current rate, balance, remaining term, and how long you expect to keep the property. You get the break-even and the total-interest comparison — including the case where the answer is to leave it alone.
Refinance in other markets
All 33 markets we publish, not a selected eight.
- Arlington Heights, IL
- Aurora, IL
- Austin, TX
- Barrington, IL
- Bolingbrook, IL
- Chicago, IL
- Dallas, TX
- Detroit, MI
- Elgin, IL
- Evanston, IL
- Fort Wayne, IN
- Glenview, IL
- Grand Rapids, MI
- Hinsdale, IL
- Houston, TX
- Indianapolis, IN
- Jersey City, NJ
- Joliet, IL
- Wichita, KS
- Naperville, IL
- Newark, NJ
- Northbrook, IL
- Oak Brook, IL
- Overland Park, KS
- Palatine, IL
- Park Ridge, IL
- San Antonio, TX
- Schaumburg, IL
- Skokie, IL
- Kansas City, KS
- Wheaton, IL
- Wilmette, IL
The same city, a different product
Program parameters on this page (down payment minimums, credit thresholds, debt-to-income ceilings) are agency guidelines and change. Nothing here is a rate quote, an offer, or a commitment to lend.