Loans Refinance Conventional refinance
Conventional refinance: change the rate, the term or the loan type
A rate-and-term refinance replaces your mortgage with a new conventional loan without taking equity out. It can change the rate or the term, move an adjustable rate to a fixed one, or replace an FHA loan and its mortgage insurance.
New to this loan? Start here: Should you refinance? Step 1 of 7 on the guided path Should I refinance?
Who it fits
- FHA borrowers with equity. FHA mortgage insurance lasts for the life of most loans. A conventional loan with enough equity has none.
- Adjustable rates. Moving to a fixed rate sets the principal and interest payment for the life of the loan.
- A shorter term. A 15- or 20-year loan raises the payment and lowers the total interest.
- A lower rate when the savings repay the closing costs within the time you expect to keep the loan.
Many homes here sit on acreage with a well and septic. They refinance into conventional loans like any other home when the appraisal supports the value, and we look at recent sales with you before an appraisal is ordered.
If you have a VA loan, a VA IRRRL is usually the simpler way to lower the rate.
Is it worth it?
Divide the closing costs by the monthly savings to find the break-even month. If you expect to keep the loan longer than that, the refinance pays for itself. Also compare the total interest over the years you expect to keep the loan, because a new 30-year term can lower the payment and still cost more in total if you pay only the new payment. Keep paying your old amount, and the extra goes to principal: the refinance calculator shows how soon the new loan would be paid off.
Rates change daily until locked. When you are ready and the numbers look right, we lock.
Calculators and guides
Common questions
How soon can I refinance after buying?
Fannie Mae sets no waiting period for a rate-and-term refinance, though some lenders do. FHA, VA and USDA streamlines have their own waits.
Can I refinance from FHA to conventional?
Yes. With at least 20% equity, the new loan has no mortgage insurance at all. With less, conventional mortgage insurance applies, and it can be removed later, unlike FHA’s on most loans. Compare the total cost.
Does a refinance restart my loan at 30 years?
It starts a new term, but a 30-year term is the longest the loan can run, not how long you have to take. Keep paying what you pay today, and at the lower rate the new loan can be paid off on or before your current payoff date. A shorter term does the same with a higher required payment.
When is the right time to refinance?
When the numbers work for you. Rates move every day with the market, and no one can predict them reliably, including us. Waiting for a better rate is a bet. Refinancing when the numbers work is a decision. We will tell you what is moving the market. We will not tell you where it is going.