Cash-Out Refinance Calculator

How to use this cash-out refinance calculator

1. Pick your loan type and enter the home’s value. Conventional, FHA and VA start at 80%, 80% and 100% maximum loan-to-value. Type your lender’s number if it differs.
2. Enter your current mortgage: balance, rate, and either the years left or your monthly principal-and-interest payment.
3. Choose the cash you want, or “Take the maximum,” then enter the new rate, term and closing costs. The new rate starts at Freddie Mac’s average 30-year fixed rate, 7.03% for the week ending September 24, 2026; your quote will differ.
4. Read the cost of the cash, then open “Compare with a second loan” to see how a home equity loan would stack up against the refinance.

How does a cash-out refinance work?

The CFPB describes it plainly: you replace your existing mortgage with a bigger mortgage and take the difference in cash. HUD’s FHA handbook defines a cash-out refinance as one where the mortgage proceeds are not limited to specific purposes, while a no cash-out refinance uses the proceeds only to pay off the existing debt and the costs of the transaction. Fannie Mae’s Selling Guide lists taking equity out of the property “for any purpose” as an acceptable use.

In the example, the new loan is $309,278: $250,000 to pay off the current mortgage, $50,000 to you and $9,278 in closing costs added to the loan. That is 77.3% of the home’s value. Because it is a new first mortgage, the whole balance gets the new rate and a new term. Freddie Mac notes that cash-out refinances generally carry a slightly higher rate because you are borrowing more, which adds risk for the lender.

How much cash can you get from a cash-out refinance?

Lenders cap the new loan as a share of the home’s value, the loan-to-value ratio (LTV). Your cash is what fits under that cap after the old mortgage (and any closing costs you roll in) is paid off. Freddie Mac’s table sets the cash-out limit for a one-unit primary residence at 80%, for fixed-rate and adjustable-rate loans alike. It is lower for other properties: 75% for a two- to four-unit primary residence, 75% for a second home and for a one-unit investment property, and 70% for a two- to four-unit investment property. Fannie Mae’s Selling Guide refers lenders to its Eligibility Matrix for maximum loan-to-value ratios and credit score requirements.

For FHA, HUD Handbook 4000.1 sets the maximum loan-to-value and the maximum combined loan-to-value at 80 percent of the adjusted value. For VA, the VA home loans page says you may refinance up to 100 percent of the appraised value. VA’s cash-out refinance page also says you must meet VA’s and your lender’s standards, so a lender can offer less. The calculator uses these numbers only as starting points; you can replace them.

Here is the most cash at the conventional 80% limit, by home value and current balance, before closing costs. Closing costs you roll into the loan come out of this room; costs you pay at closing do not.

Cash-out refinance formulas

With V = home value, L = the maximum LTV as a decimal, B = your balance and C = closing costs rolled into the loan, the most cash you can take is:

When closing costs are a share c of the new loan and rolled in, the loan that delivers a cash amount X is (B + X) ÷ (1 − c), and its payment is the standard amortization formula:

Worked example

The cap is $400,000 × 80% = $320,000. Subtract the $250,000 balance and 3% of the cap ($9,600) for rolled-in closing costs and the most cash is $60,400. To receive $50,000, the new loan is ($250,000 + $50,000) ÷ (1 − 3%) = $309,278. At 7.03% for 30 years, r = 0.005858 and n = 360, so M = $2,063.87. Your current mortgage costs $1,584.19 a month, so the payment changes by $479.68.

What does the cash really cost?

A cash-out refinance changes your whole loan, not just the extra borrowed, so its cost is easy to misjudge. The calculator measures it two ways. First, the cost of the cash: the interest on the new loan minus the interest left on your current mortgage, plus closing costs. In the example that is $189,447 of extra interest plus $9,278 in closing costs, or $198,726 for $50,000 of cash, about $3.97 per $1. The figure exceeds $1 because the cash is repaid over 30 years and the new rate and term apply to your whole balance.

Second, the effective rate on the cash. Each month you pay the new payment instead of the old one; the difference is the price of the cash. The rate that makes those extra payments repay the cash, after any closing costs you pay out of pocket, is about 11.8% a year in the example. That is the number to compare with the APR of any other loan. The table shows it for the example balance, cash and closing costs at different current and new rates.

The lower your current rate relative to the new one, the more the refinance costs, because the new rate now applies to the whole balance. The CFPB has warned that cash-out refinances can be costly when they replace an existing low-rate mortgage with one at a higher current rate. A longer term also lowers the payment while adding interest, because the refinance restarts the clock; change the new term in the calculator to see the trade-off.

Home equity loan vs. cash-out refinance

A home equity loan (or HELOC) is a second loan that leaves your first mortgage untouched. A cash-out refinance replaces the first mortgage. The CFPB puts it this way: with a cash-out refinance you replace your mortgage with a bigger one, you often pay closing costs, and you should “carefully consider the interest rate, especially if it is higher than the interest rate on your current mortgage.” Depending on the terms, it says, a cash-out refinance may be more or less expensive than a HELOC.

The cleanest way to compare is by rate. With a second loan you keep your current rate on your current balance and pay the second loan’s rate only on the cash, so your blended rate is the balance-weighted average: ($250,000 × 6% + $50,000 × 8.5%) ÷ $300,000 = 6.417% in the example, against 7.03% on the entire cash-out loan. The blended rate ignores terms and fees, so the calculator also computes the effective rate on the cash, about 11.8% a year, which is the most a second loan could charge (as an APR, fees included) and still cost less per year.

Here the second-loan route has the higher combined payment ($2,076.56 vs. $2,063.87), because its 15-year term repays the cash faster and $160,099 less in interest and fees over the full terms. With these inputs, a second loan at 8.5% would cost less per year than the refinance unless your current rate is about 6.98% or higher. The lifetime figures cover different payoff dates, so use them with the monthly payment, not instead of it.

A cash-out refinance tends to make more sense when your current rate is at or above what you would get now, or when you also want a lower rate or a different term on the whole loan. A second loan tends to make more sense when your current rate is lower than today’s rates, which is the CFPB’s point about not replacing a low-rate mortgage. Compare the effective rate with the second loan’s APR for your own numbers. Model the second loan on its own with the home equity loan calculator, or a variable-rate line with the HELOC calculator. To refinance without taking cash, use the refinance calculator.

Cash-out refinance vs. rate-and-term refinance

A rate-and-term (no cash-out) refinance uses the new loan only to pay off your old mortgage and the costs of the transaction, which is how HUD defines it. The goal is a lower rate, a different term or a different loan type, and the break-even is how long the savings take to repay the costs. A cash-out refinance borrows more than you owe, so a payment break-even doesn’t apply: the calculator instead shows what the cash costs. With almost no cash, the example loan costs $124,893 more in interest and closing costs than keeping the current mortgage. That is the price of resetting the balance at 7.03% for 30 years before any real cash is taken. Work through the rate-only case with the refinance calculator.

Cash-out refinance requirements

Each lender adds its own credit and income standards. The published program rules we verified include these:

• Loan-to-value limits. 80% conventional (Freddie Mac, one-unit primary residence), 80% FHA, up to 100% VA, as described above.
• Fannie Mae. An existing first mortgage being paid off must be at least 12 months old, measured from note date to note date, and at least one borrower must have been on title for at least 6 months before the new loan is disbursed. Exceptions include an inherited property and a legal award in a divorce, and a delayed-financing exception covers recent cash purchases.
• Freddie Mac. The borrower must have been on title for at least 6 months before the note date of the cash-out mortgage; Freddie Mac’s guide lists exceptions.
• FHA. Cash-out refinances are only for owner-occupied principal residences that you have owned and lived in for the 12 months before case-number assignment (inheritance is an exception). If your mortgage shows a current delinquency or any delinquency within 12 months of the case-number assignment date, the loan must be manually underwritten.
• VA. You refinance an existing first mortgage on the home you currently own and occupy, and you must meet VA’s and your lender’s standards for credit, income and other requirements.

Check your debt load first with the debt-to-income calculator; lenders look at it.

Cash-out refinance closing costs

Freddie Mac says to expect to spend 3% to 6% of the loan principal on a refinance, covering items such as lender origination and underwriting fees, the appraisal, title services and government recording costs. On the example’s $309,278 loan that is $9,278 to $18,557; the calculator starts with 3% as an example. Fannie Mae and Freddie Mac both allow closing costs, points and prepaid items to be financed in a cash-out loan. Rolling them in keeps cash in your pocket today, but costs more over time: in the example, paying $9,000 at closing instead of financing $9,278 changes the new payment from $2,063.87 to $2,001.96.

Government-backed loans add an upfront charge. FHA’s upfront mortgage insurance premium is 1.75% of the base loan amount, and it may be financed. VA’s funding fee for a cash-out refinance is 2.15% for first use and 3.3% after first use (rates effective April 7, 2023), unless you are exempt, and it can also be financed. Add these to the closing costs field. To estimate the rest, use the closing cost calculator.

Is cash-out refinance interest tax deductible?

Sometimes, in part. IRS Publication 936 (2025 edition) says you can deduct home mortgage interest only if you itemize deductions on Schedule A and the loan is secured by your main or second home. For a refinance, it says any secured debt you use to refinance home acquisition debt is treated as home acquisition debt, but only up to the balance of the old mortgage principal just before the refinancing. Additional debt not used to buy, build or substantially improve the home is not home acquisition debt. So interest on the part of the cash you spend on substantially improving the home can qualify, while interest on the part you use to pay off a car loan generally does not.

The Publication also says that no matter when the debt was taken on, you can no longer deduct the interest on a loan secured by your home to the extent the proceeds weren’t used to buy, build or substantially improve the home, and it caps deductible acquisition debt at $750,000 ($375,000 if married filing separately) for debt taken on after December 15, 2017. Points paid to refinance are generally not deductible in full in the year you pay them. Tax rules change, so confirm with the current Publication 936 or a tax professional.

Risks of a cash-out refinance

• The new rate covers everything. Unlike a second loan, a cash-out refinance reprices your entire balance, which can be expensive when it replaces a lower-rate mortgage.
• Your home secures a bigger loan. The larger balance leaves less equity, and cash used to pay off credit cards or other debt turns that debt into part of a mortgage secured by your home.
• The term restarts. A new 30-year loan on a mortgage with 26 years left adds payments unless you choose a shorter term.
• Closing costs and the right to cancel. Costs are real and often financed. Under Regulation Z, when a credit transaction adds or keeps a security interest in your principal dwelling you generally have the right to rescind until midnight of the third business day after the last of three events: closing, delivery of all material disclosures, and delivery of the rescission notice. If the original lender refinances its own loan, the right applies only to the extent the new amount financed exceeds the unpaid principal balance, any earned unpaid finance charge and amounts attributed solely to the costs of the refinancing (12 CFR 1026.23).

What this calculator does not model

It assumes fixed rates and level monthly payments, one cash draw, and a home value you enter yourself; lenders rely on an appraisal. It does not include property taxes, homeowners insurance, private or FHA mortgage insurance premiums, or VA funding fees unless you add the upfront amounts to closing costs. Lifetime interest is compared between loans that end on different dates. It does not model credit score or debt-to-income limits, prepayment penalties, rate buydowns, points as a separate line, cash-out for second homes or investment properties, or any tax deduction. The second-loan comparison assumes a fixed-rate home equity loan with level payments. Your lender’s Loan Estimate is the final word on rates and costs.