The tax you don’t pay
Every deed that changes hands in Philadelphia pays 4.578% in transfer tax, 3.578% to the city and 1% to the state. A refinance doesn’t move the deed. Pennsylvania’s rules exclude a mortgage, and its release or satisfaction, from the list of taxable documents, and the city puts it plainly: if you’re refinancing and the name on the title isn’t changing, you don’t owe transfer tax.
There’s no separate mortgage tax in Pennsylvania either. The new mortgage gets recorded at the county for a recording fee, and that’s the end of the government’s interest in it. On a $300,000 loan, the transfer tax you’re not paying is $13,734, which is about as close as this city comes to handing out a rebate.
When a refinance makes sense here
We don’t quote rates. What we can tell you is why Philly homeowners call us about a refinance, in rough order of how often it works out.
- Dropping FHA mortgage insurance. If you put less than 10% down on an FHA loan, the annual premium stays for the life of the loan. With 20% equity, a conventional refinance sheds it. On an existing conventional loan you can request PMI cancellation at 80% of the original value, and the servicer has to drop it at 78% on its own, so check that first.
- A shorter term. Going from 30 years to 15 or 20 costs more each month and saves a great deal of interest. This is the refinance that Northeast Philly twins seem to attract, usually after the kids move out.
- Rolling in a second lien. A HELOC and a first mortgage can become one loan. If the HELOC wasn’t used to buy the house, the lender treats it as cash-out, and the caps on the cash-out page apply.
- A meaningfully lower rate. The break-even is closing costs divided by the monthly saving. Ask for both numbers before anything else.
Conventional rate-and-term refinances go up to 97% loan-to-value on a one-unit primary residence, so you don’t need a pile of equity. FHA rate-and-term goes to 97.75%. The house still has to appraise, and a 1920s rowhome appraises the same way for a refinance as for a purchase, flaking porch rail included. See the rowhome appraisal guide.
Streamlines: FHA and VA
If your current loan is FHA, the FHA Streamline skips most of the paperwork. There’s generally no appraisal, the loan has to be current, and HUD requires a net tangible benefit, which on a fixed-to-fixed refinance means the combined rate and MIP must fall by at least 0.5%. Cash back is capped at $500. The 1.75% upfront premium gets charged again and financed. Seasoning is 210 days and six payments, subject to lender confirmation.
VA borrowers get the Interest Rate Reduction Refinance Loan, the IRRRL. The funding fee is 0.5%, compared with 2.15% or 3.3% on a purchase or cash-out, it can be financed, and there’s typically no appraisal or full credit underwriting. Same 210 days and six payments. Veterans receiving disability compensation are exempt from the fee entirely.
The abatement clock
Philadelphia’s 10-year abatement is the refinance trigger nobody warns you about. For new construction permitted after January 1, 2022, the abatement covers 100% of the improvement value in year one, then drops 10 points a year: 90%, 80%, and so on down to 10% in year ten. Abatements granted under the older rules were 100% for ten years and then stop cold. Either way the tax bill climbs, and the lender’s escrow climbs with it.
The rate is 1.3998% of assessed value. On a Fishtown new build with $500,000 of abated improvement value, the full tax on that portion is about $7,000 a year, so each 10-point step in the phase-down adds roughly $700 a year, or $58 a month, as an estimate. People refinance at the steep part of that curve to lower the rate or stretch the term so the total payment holds. Read the abatement guide, and apply for the $100,000 homestead exemption, which takes up to $1,399 a year off an owner-occupied bill.
The 2027 assessment notices went out June 29, 2026. The First Level Review deadline is September 1, 2026, and the BRT appeal deadline is October 5, 2026. If the new number looks wrong, appeal before you refinance, because the lender escrows on whatever the city has on file.
What a refinance costs here
| Line | Philadelphia | Bucks, Montco, Delco, Chester |
|---|---|---|
| Transfer tax | $0 | $0 |
| Mortgage tax | None in PA | None in PA |
| Title policy, $300,000 loan, filed non-sale rate | About $1,867 | About $1,867 |
| Recording fee | County fee, ask the lender | County fee, ask the lender |
| Lender fees, appraisal, escrow setup | Varies by lender | Varies by lender |
Title insurance in Pennsylvania comes from a statewide rate manual, and refinances use the lower non-sale rate. If your current policy is only a few years old, ask the title agent for the reissue rate, which discounts the premium further. Because title is fixed by the manual, the real differences between refinance quotes live in the lender fees, which is why the lender is the thing to shop. Run the payment on the mortgage calculator.
Start with one call
Tell us what you owe, what you pay, and whether the house has an abatement. We’ll connect you with a lender who refinances your kind of house and knows the abatement math before you have to explain it. Call us.