Can You Refinance With The Same Bank?

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Updated on Thursday, April 29, 2021

While it might be tempting to refinance with the same bank and lower your monthly mortgage payment, you should shop around with other lenders first to make sure you’re getting the best deal.

As with most financial products, it’s always best to practice due diligence and research your options before you refinance with your current mortgage lender or with another lender.

Should you get a mortgage refinance with the same bank?

You may want to refinance with your current lender because you already have a relationship with them. Since they have your personal information and payment history, they may be able to set the terms of the loan faster than a new lender.

Having your information on file may have been a significant advantage 25 years ago, but currently, any lender can access your credit score and history quickly. And since all refinance loans feature new terms, it’s a good idea to get offers from several lenders.

A January 2021 report from data and analytics company Black Knight suggests consumers are choosing to refinance with new lenders.

The number of loan originations set record highs in Q4 2020, but only 18% of the 2.8 million homeowners chose to refinance with their original servicer, the lowest share recorded to date.

According to David Yi, president of Providence Mortgage based in Bethesda, Md., consumers shouldn’t assume their current lender has the best refinance deal, especially if the lender is a traditional bank with a brick-and-mortar location.

“Banks typically don’t compete with other lenders; they just say, ‘This is the price, take it or leave it,’” Yi said. “They don’t have any motivation to negotiate because they’ll sell the loan regardless to somebody else who will come through their doors.”

It makes sense, then, to get several offers from different mortgage lenders and potentially save money.

“Mortgage lenders actually have more leverage because they have different investors who give them the wiggle room,” Yi said.

Deciding between a current and new refi lender

Deciding whether to refinance with your current bank or move on to a new one may come down to your goals.

If convenience and time are essential to you, you may find it easier to refinance with the same mortgage company. On the other hand, if cost is your primary concern, shopping around is the best avenue to take. You may even be able to get your current lender to match or beat a competitor’s best offer.

Consider these factors to decide where you should refinance your mortgage loan:

  • Simplicity: Refinancing at your current bank spares you the inconvenience of submitting new paperwork with a new lender..
  • Speed: Your current lender may be able to use your records on file to determine the refi terms a little faster than another lender.
  • Savings: By comparing offers from multiple lenders, you can be confident you aren’t overpaying. Run the numbers to determine how much you might save on your monthly payment and throughout the loan.
  • Rates: Don’t simply look at the nominal loan rate each lender offers. Ask to see the APR rate, which reflects the actual cost of borrowing by including the points and fees.
  • Fees: The average closing cost for a mortgage refinance in the U.S. is $4,345. Beware of excessive fees, including origination fees, appraisal fees and fees to discount or reduce your interest rates (points). Remember, the lower your loan costs are, the faster you can recover the cost of refinancing through your monthly mortgage savings.
  • Prepayment penalty: Before you spend time pursuing a refinance, review your current mortgage documents to ensure you will not be subject to a prepayment penalty.

Pros and cons of a refinance with the same bank


  • You may be able to refinance easier. You might only need to update your information to complete the refinance.
  • You could have more negotiating power. Because you’re a current customer, you may have more leverage to negotiate a better deal.
  • You may save money. Your lender may offer to waive the appraisal fee or lower closing costs.
  • A potentially shorter escrow period. Your current lender may be able to close faster than 40 days — the average escrow period.


  • You might not get the best loan terms. Despite the current low-rate environment, your current lender might not be willing to offer rates as good as what other lenders offer.
  • You may need to requalify. If your income or credit score is different from your lender’s record, you may have to go through the underwriting process again.
  • You may have few choices. Your bank may have limited options for loan products.

How to shop for a mortgage refi

Not all lenders will be as competitive with a refinance loan, preferring to focus on borrowers who need mortgages to buy new homes. That’s why it’s wise to get offers from multiple lenders so you can be confident you’re getting the best interest rate with the lowest costs.

Follow these steps to shop for the best mortgage refinance and maximize the opportunity to save money.

Step 1: Gather basic information you’ll need to get quotes

To make sure you get accurate loan estimates, you want to provide the same data to each lender. Here’s a quick overview of what you should have handy:

Current mortgage statement: Your recent mortgage statement has information about your total current payment, interest rate, mortgage insurance premiums, property taxes and insurance.

Date you took out your current mortgage: If you have an FHA, VA or USDA loan, this date is important to determine your eligibility for streamline refinance programs backed by the government that require very little documentation.

Estimated FICO Score: Lenders will typically run your credit to confirm your credit score. Inquiries made on the same day by several lenders should only count against your credit as one credit pull, so you shouldn’t have to worry about a sudden drop in your scores.

Estimated home value: Lenders will determine your loan amount based on how much equity you have in your property, a figure that requires that you know the value of your home. You can determine that number by asking your real estate agent to run a comparative market analysis for you. If you just need a rough estimate, you can use an online home value estimator.

Step 2: Compare rates from multiple lenders

Once you have your information together, the best thing to do may be to see what kind of quotes you can get elsewhere. One way to get immediate offers from several different lenders is to use LendingTree, an online marketplace for different types of loans.

You can also call lenders in your area or ask for a referral from a friend or family member who recently refinanced with a local company.

Step 3: Get all the quotes on the same day

Interest rates fluctuate much like the price of stocks, which is daily. For an apples-to-apples comparison, get all of your quotes on the same day. With an online marketplace, the process is relatively easy because all of the lenders you find usually contact you the same day you make your online inquiry.

If you call around to local lenders, you may or may not get calls back that day. If that’s the case, use the rate quotes you received on the same day for comparison purposes. If you call another lender on a different day, the market may have shifted and you won’t be comparing apples-to-apples price quotes anymore.

Step 4: Decide which deal is best for you

With your best refinance offer from a new lender in hand, contact your current lender and see if they will match or beat the rates, terms and costs of the mortgage loan. Then choose the lender that provides you with the best offer.

Once you’ve made a choice, ask the lender or broker to lock in the rate in writing. You should receive a document stating your lock-in rate, the duration of the lock-in rate and any interest rate reductions.

The benefit of the lock-in rate is to safeguard you from rising interest rates during escrow, although it could backfire if rates drop. In that case, talk to your lender and try to reach a compromise.