Refinance To Lower Your Monthly Payment
Free up some cash.
A lower monthly mortgage payment can help put more money in your pocket to save, invest or use for other expenses.
Will refinancing work with your budget?
Let's start with a rate and payment estimate.
Refinance to a longer-term mortgage
If today's rates are lower than your current rate, refinancing to a longer-term mortgage with a lower rate will result in lower monthly payments.
Example: If you have 13 years remaining on your 15-year mortgage and your home has appraised for $200,000, here's what refinancing from a 15-year fixed-rate mortgage at 7% to a 30-year fixed-rate loan at 5% could do:
| Mortgage Amount |
Rate | Term | Monthly Payment |
|---|---|---|---|
| Original Mortgage $150,000 |
7% | 15-year | $1,348 |
| Refinance $137,847* remaining balance |
5% | 30-year | $740 |
*Remaining balance assumes that the borrower will pay all closing costs out of pocket.
Refinance to a lower rate
If you refinance the same loan term at a lower rate, you'll have lower monthly payments.
Be sure to review the total interest paid on the amount you originally borrowed and the refinanced amount to ensure that you are comfortable with this overall expense.
Example: If you have 25 years remaining on your 30-year mortgage and your home has appraised for $200,000, here's what refinancing from a 7% rate to a 5% rate could do:
| Mortgage Amount |
Rate | Term | Monthly Payment |
|---|---|---|---|
| Original Mortgage $150,000 |
7% | 30-year | $998 |
| Refinance $141,198* remaining balance |
5% | 30-year | $758 |
*Remaining balance assumes that the borrower will pay all closing costs out of pocket.
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