Can you refinance a fixed-rate mortgage?

What are the facts on refinancing a fixed-rate mortgage?

Yes, those with a fixed-rate mortgage can opt to refinance their loan. Refinancing means replacing your current mortgage with a new one. The new mortgage may have a lower interest rate or a longer repayment time.

People typically do refinance their mortgage to capitalize on significantly lower rates since acquiring the original mortgage. It can offer benefits such as reduced monthly payments, though it also means paying more interest over time.

The decision to refinance a fixed-rate mortgage depends on your financial situation, plans, and current mortgage terms. You should evaluate your options carefully, possibly with a financial advisor.

Do you want to start the mortgage refinance process? Keep reading for more refinancing tips or start your mortgage refi journey with our quick application.

You can also use our refinance calculator to better understand how much you can potentially save.

Can you refinance a fixed-rate mortgage to another type

Sure, it is possible to refinance a fixed-rate mortgage to another type. Many homeowners choose to switch from fixed-rate mortgages to adjustable-rate mortgages (ARMs) to possibly reduce their interest rates.

Important factors such as interest rates and personal financial situation should be considered. Each mortgage type carries unique benefits and risks. So, it’s crucial to weigh these options carefully before deciding.

Can I refinance a fixed-rate mortgage to a shorter term?

Absolutely, you can refinance a fixed-rate mortgage to a shorter term.

Homeowners often choose to refinance when mortgage rates are low, allowing them to pay off their home faster and with less interest. Refinancing to a shorter term may result in higher monthly payments, but significant long-term savings.

The key is to ensure the costs associated with refinancing, such as closing costs, don’t outweigh the potential savings.

When does it make sense to refinance a fixed rate mortgage?

When does it make sense to consider refinancing? Let’s look at some scenarios.

Lower interest rates

The first situation is if interest rates have significantly dropped since you took your original mortgage. This could mean substantial savings over the life of your new loan. You’ll need to consider all costs and fees when looking into a mortgage refinance. Refinancing only makes sense if you save more in interest than what you spend on refinancing.

Potential for long-term savings

Another scenario is if your credit score has improved significantly. This could qualify you for a lower interest rate, which can reduce your monthly payments or overall loan amount. However, you should bear in mind that refinancing is not free. Check that the costs associated with the new mortgage don’t outweigh the savings.

Improved credit score

An enhanced credit score can potentially open the door to refinance your fixed-rate mortgage. Improved creditworthiness often leads to better loan terms and lower interest rates. However, other factors such as income, debt, and the value of your home also play crucial roles.

Potential for lower monthly payments or overall loan amount

Refinancing a mortgage can potentially lower your monthly payments. This usually happens when you secure a loan with a lower interest rate than your current mortgage. However, the impact on your monthly payments will depend on various factors such as the terms of your new and old loans.

Desire to switch between fixed & adjustable rates

Switching from a fixed-rate mortgage to an adjustable-rate mortgage could make sense when interest rates are falling. You may benefit from the decreasing rates instead of being stuck with a high fixed-rate. If you want to move before the fixed period ends, you can save money with an adjustable-rate mortgage. This type of mortgage has lower initial rates and is known as ARM.

Shorten your loan term

Refinancing a fixed-rate mortgage can potentially shorten your loan term. You can achieve this by obtaining a new mortgage with a shorter term. However, this option might increase your monthly payments.

Access home equity for other financial needs

Refinancing a fixed-rate mortgage may help you access your home’s equity for other needs. When you refinance, you could potentially lower your monthly payments or shorten your loan term. Refinancing allows you to access funds from your home’s value. These funds can be used for various purposes such as home improvements, debt repayment, or other financial needs.

When does it make sense to refinance a fixed rate mortgage?

Are you ready to shorten your loan term, adjust your monthly payment or switch mortgage type? If so, you can start the process by applying today. A home loan with better terms is only a few clicks away with Owning! If you have questions about options you can also contact us online or call us at (833) 346-1397.

Using funds from a Cash-out Refinance to consolidate debt may result in the debt taking longer to pay off as it will be combined with borrower’s mortgage principle amount and will be paid off over the full loan term. Contact Owning for more information.

Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Contact Owning, Inc. for current rates. Restrictions apply.

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Owning for current rates and for more information.

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Owning, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Owning, Inc. Owning, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. Owning does not provide tax advice. Please contact your tax adviser for any tax related questions.