Refinancing at a longer repayment term may lower your mortgage payment, but may also increase the total interest paid over the life of the loan. Refinancing at a shorter repayment term may increase your mortgage payment, but may lower the total interest paid over the life of the loan. Contact us to discuss the option that best meets your needs.
Should You Refinance to Lower Your Mortgage Payment or Rate?
You could save money by lowering your payment or interest rate.
Free up cash in your monthly budget
When your mortgage feels expensive, you may be able to lower what you pay each month.
Often, you can change terms to make your monthly payment more affordable or save money in the long term.
Refinancing could help you if:
- Interest rates are lower than your current rate.
- Household income or expenses have changed.
- Adjustable‑rate mortgage is increasing.
Who is mortgage refinancing for?
A rate-and-term refinance might be right for you if you:
- Want more breathing room in your monthly budget.
- Plan to stay in your home for several years.
- Have improved your credit or home value since purchase.
- Want to keep payments stable.
- Have not refinanced recently.
You could save money if interest rates are lower than your current rate, your income or expenses have changed, or you have an adjustable-rate mortgage that is increasing.
Things to consider?
Make sure to account for the following:
- Closing costs:
Will you still save money or break even once you consider closing costs? Estimate closing costs - Timing:
You’ll be creating a new loan, with a new 15-, 20-, 25- or 30-year term. Consider any plans to sell or move. - Total interest:
Depending on your new terms, you could pay more interest over the life of the loan.
Estimate interest - Interest rates:
Compare the rate you’re paying now to today’s rate, and make sure it makes sense.
Check interest rates
FAQ
- Refinancing does not automatically reset your mortgage to a new 30-year term, but it does create a new loan.
- You can choose a new repayment timeline to 30 years to lower monthly payments or
- You can also select a 15, 20, or 25-year term to avoid extending your debt.
- You can generally refinance a mortgage again after six to seven months.
- Specific timelines vary based on the loan type and whether you are taking cash out.
- A good credit score gets you better rates.
- You do not need a perfect credit score.
- There are options for homeowners with lower credit scores.
PNC does not have prepayment penalties.
Want to Talk About Refinancing?
Talk through your situation with a mortgage specialist.
Important Notice to Servicemembers and Their Dependents. If you are currently eligible for benefits provided by Servicemembers Civil Relief Act (SCRA), refinancing current debt may not be beneficial.
PNC is a registered service mark of The PNC Financial Services Group, Inc. (“PNC”). All loans are provided by PNC Bank, National Association, a subsidiary of PNC, and are subject to credit approval and property appraisal.
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