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Rate-And-Term Refinance Home Loans in Texas

Lower your interest rate, shorten your loan term, or both, without taking cash out. A rate-and-term refinance replaces your current mortgage with a new one that better fits your financial goals. Homeowners across Texas, from Dallas to Austin to Houston, use this refinance to save money and build equity faster.

Key Highlights

Lower your monthly mortgage payment
Shorten your loan term to build equity faster
Switch from adjustable to fixed-rate stability
Remove PMI if equity allows
Improve financial flexibility over time
No cash out—just a smarter mortgage structure

Qualification Overview

A rate-and-term refinance allows you to adjust your existing mortgage to secure a lower interest rate, shorten the repayment period, or both, without withdrawing cash. Texas homeowners typically qualify based on credit, income, and available home equity, with most programs allowing up to 97% loan-to-value for primary residences. This refinance is ideal for borrowers who want to take advantage of lower market rates or improve long-term affordability. It can also help remove private mortgage insurance (PMI) once your loan balance drops below 80% of your home’s value. Unlike a cash-out refinance, no funds are disbursed at closing, the entire focus is on optimizing your loan’s structure for future savings.

Ideal Borrower

Homeowners with higher interest rates seeking to save money
Borrowers wanting to shorten loan term for faster payoff
Owners ready to remove PMI
Those planning to stay in their Texas home long-term
Borrowers with stable income and strong credit

Let's Get You Pre-Qualified!

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Example Scenario

James and Tasha in Austin bought their home five years ago with a 30-year mortgage at 6.5%. With rates lower, they refinance into a new 20-year fixed loan at 5.5%, reducing their total interest cost by over $80,000 and shaving years off their payoff timeline. Their monthly payment rises slightly, but their principal reduction accelerates dramatically—helping them build equity faster while securing predictable payments.

See how Rate-And-Term refinance stacks up against VA IRRRL, FHA Streamline and Cash-Out refinance loan programs.

VA IRRRL

For current VA loan borrowers only
No appraisal or income verification needed
Low or waived funding fee for veterans
Streamlined process closes in as little as 30 days
Must show a lower rate or payment benefit

FHA Streamline

Exclusive to existing FHA loan holders
No appraisal or income documentation required
Fast approval with minimal paperwork
Must show a tangible financial benefit
No cash-out option available

Cash-Out

Access up to 80% of home equity as cash
Use funds for debt payoff or renovations
Requires new appraisal and full documentation
Typically slightly higher rate than rate-term refis
Available for primary, secondary, or investment homes

FAQ: Rate-And-Term Refinance Loans

What’s the difference between a rate-and-term refinance and a cash-out refinance?

A rate-and-term refinance adjusts your mortgage terms—like rate or duration—without taking equity out as cash. A cash-out refinance increases your loan balance to provide cash at closing.

How much can I save by refinancing my mortgage rate?

Savings depend on your loan size and rate difference. Even a 1% reduction can save thousands in interest over time. Use a refinance calculator or consult your lender to see your potential benefit.

Does a rate-and-term refinance reset my loan to 30 years?

Not necessarily. You can choose a new term—such as 10, 15, 20, or 30 years—depending on your goals. Shorter terms build equity faster and reduce total interest paid.

Can I remove PMI with a rate-and-term refinance?

es. If your home’s value has increased and your loan-to-value ratio is below 80%, refinancing may remove PMI, lowering your monthly costs.

What credit score do I need to qualify?

Most conventional programs in Texas require a minimum FICO® score of 620, though higher scores can secure better rates and faster approval.

Are there closing costs for a rate-and-term refinance?

Yes, typically 2–5% of the loan amount. However, these costs are often rolled into the new mortgage to minimize upfront expense.

How long does the refinance process take?

Most refinances close within 30–45 days, depending on appraisal, underwriting, and title timelines.