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 Oakland alleged in 2015 that Wells Fargo issued riskier, higher-cost mortgages to African Americans and Latinos and blocking them from refinancing. Roland Li,, "California files support for Oakland in Wells Fargo mortgage suit," 12 Sep. 2019 In some cases, companies don't offer to help pay off student loans but instead offer ways to refinance your college debt. Susan Tompor, Detroit Free Press, "The right job can help you pay down your student loans. Here's how to find it," 9 Aug. 2019 However, a research institute specializing in energy and environmental analysis warns that a new law allowing utilities to refinance debt on plants retired early could tie up electric customers’ dollars for decades. Judith Kohler, The Denver Post, "Law aimed at speeding up coal-plant closures cast as both boon, danger to Colorado ratepayers," 4 July 2019 Other expense reductions have included consolidating bus routes, reducing utility costs through energy-efficiency projects, canceling summer school, refinancing long-term debt and delaying spending on maintenance. Bob Dohr, Milwaukee Journal Sentinel, "The Palmyra-Eagle School Board has taken the next step toward dissolving the school district," 2 July 2019 That means a company is more likely to be able to repay or refinance debt. Maria Armental, WSJ, "U.S. Corporate Cash Piles Drop to Three-Year Low," 10 June 2019 The state will also look to refinance Hartford’s debt – reducing annual contributions by stretching payments farther into the future. Jenna Carlesso, Courant Community, "Under New Deal, State Will Pay Off Hartford's Debt," 22 Mar. 2018 Board members at Township High School District 113 are moving forward with a refinancing plan meant to lower taxpayers’ obligations related to $120 million in upgrades that were completed following a successful referendum in 2013. Karen Berkowitz,, "Township High School District 113 looks to ease taxpayer burden with plan to refinance $43 million debt," 21 July 2019 Plans range from refinancing options to summer jobs and clinical rotations with loan-addressing incentives to return for full-time work., "Oregon tackles the veterinary suicide crisis, starting with the stigma," 10 July 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.

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First Known Use of refinance

1995, in the meaning defined above

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2 Nov 2019

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


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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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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