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

Definition of refinance

transitive + intransitive

: 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 Mortgage holders who are looking to take advantage of low interest rates and opportunities to refinance are also dependent on lenders with enough capacity to process the applications and the belief that payments will be made under the new terms. Karen Ho, Quartz, "Missed rent and mortgage payments are rippling across the economy," 30 Apr. 2020 Mortgage market update Here's a rundown of the new lending conditions for borrowers who want to buy and homeowners who want to refinance or tap their equity. Catherine Reagor, azcentral, "Is it harder to get a mortgage or refinance in COVID-19 pandemic? Here's what we found," 23 Apr. 2020 Sellers will likely purchase another home when their current home sells; homeowners and landlords may be able to refinance or extract equity at a lower rate; and renters may be able to take part in the American dream of homeownership. Barbara Ramsey, Anchorage Daily News, "Here’s some good news from the Anchorage real estate market," 27 Mar. 2020 Last fall, Wauwatosa saved $500,000 by refinancing debt when rates dropped. Evan Casey, Milwaukee Journal Sentinel, "Wauwatosa mayoral candidates discuss how they would improve traffic safety and address new developments," 18 Mar. 2020 The owner has faced foreclosure on the properties in the past and evaded a sale in 2018 by refinancing its debt with a loan from BridgeInvest. Madison Iszler,, "Owner of former Lone Star Brewery complex wants at least $13.5 million for property," 5 Mar. 2020 The low rates helped some businesses last year, with many reducing their financial costs by refinancing debt, and others getting a boost from demand among Brazilians with access to cheaper loans or people seeking higher returns on their investments. Jeffrey T. Lewis, WSJ, "Brazil Economy Grows at Slowest Pace in Three Years," 4 Mar. 2020 Sycamore surprised Wall Street last year by refinancing the debt of Staples in a transaction that helped pay for a $1 billion dividend to the private equity firm. Sapna Maheshwari, New York Times, "Victoria’s Secret Sale Caps End of Wexner’s Retail Empire," 20 Feb. 2020 AAA Bank is extending support to customers in the form of loan and credit card payment fee relief, a 90-day no-payments offer on new or refinanced car loans and overdraft fee relief. Carol Cain, Detroit Free Press, "CEOs say front-line workers, customers deserve their help," 26 Apr. 2020

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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Time Traveler for refinance

Time Traveler

The first known use of refinance was in 1995

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Statistics for refinance

Last Updated

17 May 2020

Cite this Entry

“Refinance.” Dictionary, Merriam-Webster, Accessed 29 May. 2020.

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More Definitions for refinance



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


How to pronounce refinance (audio)

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 How to pronounce refinance (audio) \

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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