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

: 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 Skokie officials recently signed off on issuing as much as $35 million in municipal bonds to finance the interior renovation of the Skokie Public Library and to refinance millions of dollars in debt. Brian L. Cox,, "Skokie issues bonds to pay for library renovation, refinancing of debt," 5 Nov. 2019 One reason to refinance involves swapping your current loan for one with a lower interest rate, thus lowering your monthly payment. Russ Wiles, azcentral, "Refinance or not? Getting a better deal isn't a slam dunk, but low rates offer compelling choices," 20 Oct. 2019 The board also agreed to refinance some of its older bonds since interest rates have dropped. Laura Groch, San Diego Union-Tribune, "How they voted, Sept. 22," 22 Sep. 2019 Allow borrowers to refinance their student loans to lower rates and overhaul the Public Service Loan Forgiveness program to require lenders to give better information about eligibility and progress toward forgiveness to borrowers. NBC News, "Klobuchar proposes plan to reduce college costs, not make it free," 26 Oct. 2019 The concept is similar to refinancing a mortgage by adding extra years to pay it off, which eventually costs more overall in the end. Christopher Keating,, "Study says teachers pension problems still not solved," 16 Oct. 2019 There were times when the priority was to allow people to refinance student loans. Greg Weiner, National Review, "Elizabeth Warren’s Limitless Ideology," 26 Sep. 2019 That includes paying down debt, refinancing at lower rates and boosting emergency savings. San Diego Union-Tribune, "What the Fed’s rate cut means for you," 18 Sep. 2019 This means, on an average, a person will save a significant amount of interest when either purchasing or refinancing into a 20-year mortgage compared with a 30-year. Real Estate, "Four reasons to consider a 20-year mortgage," 9 Sep. 2019

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.

See More

First Known Use of refinance

1995, in the meaning defined above

Keep scrolling for more

Learn More about refinance

Time Traveler for refinance

Time Traveler

The first known use of refinance was in 1995

See more words from the same year

Statistics for refinance

Last Updated

30 Nov 2019

Cite this Entry

“Refinance.” The Dictionary, Merriam-Webster Inc., Accessed 14 December 2019.

Keep scrolling for more

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)

Keep scrolling for more

More from Merriam-Webster on refinance

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

Comments on refinance

What made you want to look up refinance? Please tell us where you read or heard it (including the quote, if possible).


to assail by words or arguments

Get Word of the Day daily email!

Test Your Vocabulary

Great Scrabble Words—A Quiz

  • scrabble tiles that read scrabble quiz
  • Which of the following Q-without-U words means the number five in cards or dice?
Spell It

Can you spell these 10 commonly misspelled words?

Add Diction

Test Your Knowledge - and learn some interesting things along the way.

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!