- Refinancing a jumbo loan to a conventional mortgage can lower your interest rate and monthly payment if your balance is within conforming limits.
- Refinance timing matters—choose when rates are lower, but account for closing costs and other expenses.
- Strong credit, thorough preparation, and comparing lenders are key to a smooth refinancing process.
When you want to buy a higher-priced property that surpasses conforming loan limits, a jumbo mortgage loan comes in handy. This form of financing can allow you to borrow a lot more—sometimes $2 million or higher—to acquire a costly residence.
But jumbo loans can often come with higher interest rates than conforming loans. For these and other reasons, it can make sense to refinance your jumbo loan and capitalize on a lower rate if you qualify.
But you aren’t necessarily limited to refinancing to a new jumbo loan. You can also refi to a conventional conforming loan if the conditions are right.
Explore worthy reasons to refinance your jumbo loan to a conforming mortgage, the benefits and disadvantages of refinancing a jumbo loan, the ideal time to pull the trigger on a refi, and the steps involved with this process.
Refinancing to a conventional loan: Is it allowed?
You may be able to refinance a jumbo loan into a conventional conforming loan — if your current balance falls within your area’s conforming loan limit and you meet the lender’s credit, income, and equity requirements. This has to do with the conforming loan limit in your area.
The conforming loan limit for 2026 in most areas is $832,750 for a single-family home, which represents a limit increase of over $26,000 from 2025’s $806,500. In high-cost areas, the new conforming loan limit is actually higher: $1,249,125.
These limits are set by the Federal Housing Finance Agency (FHFA) and vary based on county of residence. Conventional loans that conform to these limits are bought by Freddie Mac and Fannie Mae, two government-sponsored enterprises, who serve to limit a lender’s risk in case you default.
Good reasons to refinance your jumbo loan
If your loan balance owed is now less than $832,750 (in most areas) or under $1,249,125 in high-cost areas, you might want to refinance your jumbo loan to a conventional conforming loan.
That’s because doing so could save big money on interest if the new conventional loan has a lower interest rate.
Refinancing to a conventional loan can open up more loan options since conforming mortgages are offered by a wider range of lenders than jumbo loans.
Here’s a quick look at how interest rates are trending for jumbo loans vs. conventional loans:
How we source rates and rate trends
Rates based on market averages as of Dec 02, 2025.Product Rate APR 30-year Fixed Refinance 6.35% 6.37% 30-year Fixed Jumbo Refinance 6.82% 6.84%
Alternatively, you could refinance your jumbo loan to a:
- New jumbo mortgage, which can be worthwhile if you can secure a lower fixed rate and want to reduce your monthly payment, or if you currently have an adjustable-rate mortgage (ARM) jumbo and want a more reliable fixed rate.
- New jumbo or conventional cash-out refinance loan if you want to pull equity from your home to pay for things like home improvements, debt consolidation, or medical bills.
Pros and cons of a jumbo loan refi
Let’s say you bought a $1 million home five years ago via a jumbo mortgage loan at a fixed rate of 8.00%, for which you put down 20%. Your current balance today is $700,000, and your monthly principal and interest payment is $5,870.
If you refinance your jumbo to a conventional conforming loan at a 6.667% fixed rate, your new monthly payment would only be about $4,502. The downside is that you would be resetting your term and adding another five years of payments onto your repayment schedule, but you’d reduce your monthly payment by $1,368.
It’s also easier to refi to a conforming loan than another jumbo loan, “as you’ll have access to more participating lenders and loan products via this route,” says Dennis Shirshikov, adjunct professor of economics at City University of New York.
But keep in mind you’ll have to pay closing costs when you refinance a mortgage. This is true whether you refi to a new conforming loan or another jumbo loan, but you could pay a bit more than normal for another jumbo loan – possibly between 3% and 6% of the loan amount versus 2% to 5% for most other mortgage refis.
You may need to pay for private mortgage insurance (PMI) if your equity is below 20%.
To make a more informed decision, request an itemized worksheet from your chosen lender before proceeding with a jumbo refinance.
The best time to refinance your jumbo loan
As explained earlier, the ideal time to ponder a jumbo refi to a conforming loan is when your loan balance falls within the conforming loan limits in your area — along with other refinance timing considerations like interest rates and your personal financial profile.
However, you need to ensure you can cover the expenses involved with refinancing, including the closing costs.
Additionally, you should have good credit—ideally a credit score of 700 or higher—sufficient cash reserves saved, and a debt-to-income ratio of no higher than 45%.
You may want to postpone applying for a refinance if you need to save more or boost your credit score a bit higher.
What’s involved with refinancing your jumbo loan
Is now the right time to refinance your jumbo loan to a conventional conforming mortgage? Have you crunched the numbers and determined that you’re within your area’s conforming loan limit?
If so, prepare to:
- Review your credit. Read your three free credit reports and contest any inaccuracies or errors you notice. Check your credit score through your bank or credit card, too; if it’s lower than desired, work to raise your score by paying your bills on time and in full, not opening up any new accounts or credit lines, not closing any existing credit accounts, and not exceeding your credit limits.
- Gather the necessary paperwork. Collect key documents like recent tax returns, paycheck stubs, and financial statements in case your lender requests them, and prepare to furnish private information like your Social Security number.
- Shop around for a new refinance loan among several different lenders. Request rate quotes and loan offers, and compare these offers and the total financing costs carefully to choose the best option.
- Submit a refinance application along with requested documents.
- Pay for a home appraisal if the lender requires it.
- Await an underwriting decision.
- Close on the refinance loan, if approved, and sign all the paperwork and legal documents.
The bottom line
Consider the pros and cons of refinancing thoroughly and evaluate whether the advantages outweigh the expenses and effort involved. Also, consider how much longer you plan to remain in your home before selling and moving; after all, you want to be able to recoup what you paid in closing costs.
Ready to explore your refinancing options and potentially save on your monthly payment? Start your application with Refi.com today and let us help you find the right solution for your financial goals.
