Can You Refinance a Mortgage for a Lower Payment?
Yes. After 17 years helping homeowners across the country refinance, I can tell you lowering your monthly payment is the number-one reason people call me. There are a few different ways to make it happen, and the right one depends on your specific situation.
Three Ways to Lower Your Payment
1. Get a lower interest rate. If rates have dropped since you got your loan, or if your credit has improved, you may qualify for a lower rate. A lower rate means less interest each month, which means a lower payment.
2. Extend your loan term. If you are partway through a 30-year mortgage, refinancing into a new 30-year loan resets the clock. This spreads your remaining balance over a longer period, which lowers your monthly payment. The trade-off is that you may pay more in total interest over the life of the loan.
3. Remove PMI. If you are paying private mortgage insurance and your home has enough equity, refinancing into a conventional loan without PMI can lower your total monthly housing cost.
How Much Could Your Payment Drop?
The amount depends on your current rate, the new rate, your loan balance, and the new loan term. Even a modest rate improvement can make a noticeable difference in your monthly payment when applied over a full loan term.
The best way to find out is to run the numbers for your specific situation.
What About Your Total Cost?
Lowering your monthly payment is great, but think about the big picture too. If you extend your loan term, you might pay less each month but more over the life of the loan. Make sure the trade-off works for your goals.
If you can lower your rate without extending your term much, that is the ideal scenario. You pay less each month and less overall.
Will You Qualify?
To refinance, you generally need:
- A credit score that meets the loan program's minimum
- Enough income to support the new payment
- Enough equity in your home
- A property that appraises at or above the needed value
See Your Options
Check your rate at Lendtrain in 30 seconds. You will see what your new payment could look like and whether the savings make sense for you. Calculate your refinance break-even point to confirm the numbers work.
Rate quotes are estimates based on the credit score you enter. Actual rates may differ based on verified credit, income, and property details.