re·​fi·​nance | \ ˌrē-fə-ˈnan(t)s, (ˌ)rē-ˈfī-ˌnan(t)s, ˌrē-(ˌ)fī-ˈnan(t)s\
refinanced; refinancing; refinances

Definition of refinance 

: to renew or reorganize the financing of something : to provide for (an outstanding indebtedness) by making or obtaining another loan or a larger loan on fresh terms refinance a mortgage With rates tumbling, pay a little more now and retain the flexibility to refinance again next year.— Daniel Kadlec

Examples of refinance in a Sentence

Recent Examples on the Web

Today many people choose to refinance their loan rather than pay it off. Abigail Van Buren, Houston Chronicle, "Red flags remain in romance that returns after 47 years," 3 June 2018 The fake expert recommended that students try to refinance their loans, which was helpful to the business of LendEDU. Austan Goolsbee, New York Times, "What Advertising History Says About the Future of Fake News," 25 May 2018 When consulted about what people should do about student debt, Cloud often encouraged them to refinance their loans - one of the services provided by LendEDU. Rachel Siegel,, "Widely quoted student loans expert exposed as fictitious creation of a for-profit company," 26 Apr. 2018 That was true for Lucas Hough, a 25-year-old Temple graduate who, within the last several months, became financially independent from his parents after refinancing his student loans. Anna Orso,, "How to buy a house or pay for rent? Mom and Dad might help," 11 Apr. 2018 SoFi got its start refinancing student loans but now provides personal and mortgage loans and wealth management services. Kathleen Pender, San Francisco Chronicle, "SoFi going public not a priority this year, new CEO Noto says," 9 Apr. 2018 This was true whether a black applicant wanted to buy a house, refinance an existing loan or take out a home equity line of credit. Aaron Glantz, Detroit Free Press, "Minorities still denied home mortgage loans significantly more than whites, investigation shows," 15 Feb. 2018 The Chicago resident said the experience has inspired her to refinance her debt at a lower interest rate and eat more meals at the restaurant to save more. Anne Tergesen, WSJ, "States Boost Access to Retirement Plans, Seeking to Close Savings Gap," 8 Dec. 2018 Manafort then secured a $16-million loan from an unnamed party, according to the court documents, in part to refinance the Genesis loans and save his townhouse from foreclosure. Rachel Weiner,, "Paul Manafort fights use of financial records at trial," 29 June 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'refinance.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of refinance

1995, in the meaning defined above

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Statistics for refinance

Last Updated

28 Dec 2018

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Time Traveler for refinance

The first known use of refinance was in 1995

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Financial Definition of refinance

What It Is

Refinance refers to the replacement of a debt with new debt bearing different terms.

How It Works

Financing involves borrowing a specific amount of money over a length of time at an agreed-upon interest rate.  Payments on the debt are divided between interest and principal.  If circumstances change, for example, the length of time needed to repay the debt is longer and the lender agrees, the loan may be refinanced, extending the term and lowering the period payments (because they are extended over a longer period of time.)  If interest rates change, the debt may be refinanced using a lower interest rate.

For example, the $150,000 loan below is shown with a term of 15 years at 8% per year.  By year 5, the market interest rate drops to 5%.  When the loan is refinanced over the balance of the term, for example, the savings in principal and interest payments on the loan will be over 32,000.

Refinancing may also convert an adjustable rate mortgage to a fix rate mortgage, reducing the interest rate risk to the borrower.

Why It Matters

Refinancing may be restricted on debts containing "call provisions," requiring a penalty payment in the event of a refinancing. In addition, a refinancing usually requires a closing and transaction fee that may be expensive. As a result, it is important to calculate the present value (the value in today's dollars) of the savings and compare it to the closing costs of the refinancing.

Source: Investing Answers



English Language Learners Definition of refinance

: to get a new loan to pay (an older debt) : to finance (something) again


transitive verb
re·​fi·​nance | \ ˌrē-fə-ˈnans, -ˈfī-ˌnans \

Legal Definition of refinance 

(Entry 1 of 2)

1 : to renew or reorganize the financing of
2 : to revise the terms of (a debt obligation) especially in regard to interest rate or payment schedule refinance a mortgage

intransitive verb

: to finance something anew



Legal Definition of refinance (Entry 2 of 2)

: a financing of something anew especially : a revision of the terms of a debt obligation (as a mortgage)

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Rhyming Dictionary: Words that rhyme with refinance

Spanish Central: Translation of refinance

Nglish: Translation of refinance for Spanish Speakers

Britannica English: Translation of refinance for Arabic Speakers

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