In most scenarios, a refinance will affect your monthly mortgage payment. But whether the amount goes up or down depends on your personal financial goals and the type of refinance you choose.
Rate-and-term refinance Many homeowners choose to refinance so they can reduce their mortgage costs, either by locking in a more favorable interest rate or shortening the term of their loan and paying less interest over time. In both of these scenarios, your monthly mortgage payment will be impacted. If you lock in a lower interest rate, your monthly payments will be reduced. If you change the term of your loan (say, from 30 years to 15 years) your monthly payment amount will likely increase, but you’ll make fewer interest payments throughout the life of your loan.
A cash-out refinance allows you to convert your home equity to cash in exchange for a higher loan balance. While you may not be changing your interest rate in this process, your monthly mortgage payment will be impacted by that increased principal amount.