Refinancing
Refinancing means replacing an existing mortgage with a new one, either with the same lender or a different lender. Borrowers refinance to secure a different rate, change the mortgage structure, extend or shorten amortization, consolidate debt, or access equity.
Refinancing can involve fees such as appraisal, legal costs, and potentially a penalty if the current mortgage is broken before the term ends. The value of refinancing depends on the net savings or benefits after all costs are included.
Why this matters:
Refinancing can lower costs or improve cash flow, but it can also extend debt or trigger penalties. Understanding the full cost and the long-term impact helps borrowers avoid “savings” that don’t actually save.
Related Mortgage Terms
Often confused with:
Mortgage Term — Renewal happens at the end of a term; refinancing is changing the mortgage structure/amount.
Closely related:
Equity — Equity often determines refinance options.
Closed Mortgage — Refinancing mid-term can trigger penalties.
Next step:
Equity — Understand the foundation that often makes refinancing possible.