# Refinance

> To refinance is to pay off your mortgage with a new loan, usually to lower the rate, change the term or take cash out. The main types and what they cost.

URL: https://mail.mortgage-math-us.com/glossary/refinance/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**A refinance** replaces your current mortgage with a new loan that pays the old one off. People refinance to get a lower rate or payment, change the loan term or type, drop mortgage insurance, or borrow against their equity — and they pay closing costs again to do it.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Typical refinance costs, low end (share of principal) | 3% | [Freddie Mac My Home](https://myhome.freddiemac.com/refinancing/costs-of-refinancing) | Oct 28, 2026 |
| Typical refinance costs, high end | 6% | [Freddie Mac My Home](https://myhome.freddiemac.com/refinancing/costs-of-refinancing) | Oct 28, 2026 |
| 30-year fixed average | 7.24% | [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) | Week of Oct 29, 2026 |

## Types of refinance

*The main ways to refinance*

| Type | What changes | Cash to you |
|---|---|---|
| [Rate-and-term](https://mail.mortgage-math-us.com/glossary/rate-and-term-refinance/) | Rate, term or loan type | Little or none |
| [Cash-out](https://mail.mortgage-math-us.com/glossary/cash-out-refinance/) | A larger loan replaces the old one | The difference, minus costs |
| [Streamline](https://mail.mortgage-math-us.com/glossary/streamline-refinance/) (FHA, VA, USDA) | Rate or payment, with less paperwork | None or very little |

## What it costs

Freddie Mac puts typical refinance costs at 3%–6% of the loan principal — $9,000 to $18,000 on a $300,000 loan — paid in cash, rolled into the balance or covered with a higher rate. A refinance pays off only if you keep the new loan past its [break-even point](https://mail.mortgage-math-us.com/glossary/break-even-point/). Restarting a 30-year term can also raise the total interest you pay even when the monthly payment falls. Run your numbers through the [refinance break-even calculator](https://mail.mortgage-math-us.com/tools/refinance-break-even-calculator/).

## Sources

- [Freddie Mac My Home](https://myhome.freddiemac.com/refinancing/costs-of-refinancing) — Typical refinance closing costs, low end (share of loan principal); Typical refinance closing costs, high end (share of loan principal) (Oct 28, 2026)
- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [CFPB: Should I refinance? (handout)](https://files.consumerfinance.gov/f/documents/cfpb_should_i_refinance_handout.pdf)
- [Freddie Mac My Home: Costs of refinancing](https://myhome.freddiemac.com/refinancing/costs-of-refinancing)

_General information, not financial advice._