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Mortgage Glossary

Rate-and-Term Refinance

Mike Starr·Reviewed August 2026

A rate-and-term refinance replaces an existing mortgage with a new loan that has a different interest rate, loan term, or both — without taking any additional cash out. The goal is usually to lower the monthly payment, reduce the total interest paid, or switch from an adjustable to a fixed rate. It is the most common type of refinance and generally has stricter LTV limits than a cash-out refinance.