Cash-Out Refinance Calculator
Cash in hand, new payment, LTV, and true cost.
Net cash after paying off old loan and costs
Estimates for planning only, not financial advice.
A cash-out refinance swaps your current mortgage for a bigger one and hands you the difference. With a $400,000 home, a $240,000 balance, and an 80% LTV cap, the maximum new loan is $320,000. After paying off the $240,000 and $8,000 of closing costs, you net $72,000 in cash. The new loan at 6.5% over 30 years costs $2,022.62 a month. This calculator shows the cash, the payment, the LTV, and the total interest so you can judge whether the cash is worth its 30-year price.
How to Use This Calculator
Enter your home\'s current market value (use a realistic estimate; the lender\'s appraisal decides) and your current mortgage payoff balance. Set the maximum LTV your loan program allows, usually 80% for conventional cash-out. Enter the new rate you have been quoted, the new term, and estimated closing costs. The results show the maximum new loan, gross and net cash to you, the new monthly payment, and total interest over the new loan\'s life.
Enter home value and current balance. Be conservative on value; appraisals surprise optimists.
Set LTV cap, quoted rate, term, and closing costs from your Loan Estimate.
Compare net cash against the new payment and total interest. If the cash funds 24% credit card debt, the trade usually wins; if it funds a vacation, it rarely does.
The Cash-Out Formulas
The LTV cap is the binding constraint in most cases: it sets the ceiling on the new loan, and everything else follows. Closing costs deserve respect because they come straight out of your cash: $8,000 of costs on $80,000 of gross cash is a 10% haircut before you see a dollar. Rolling costs into the loan preserves cash today but means paying interest on the costs for 30 years. The payment formula is standard amortization on the new balance, rate, and term.
Worked Example
Home value $400,000, current balance $240,000, 80% LTV cap, new rate 6.5%, 30-year term, $8,000 closing costs. Maximum new loan: $400,000 x 80% = $320,000. Gross cash: $320,000 - $240,000 = $80,000. Net cash: $80,000 - $8,000 = $72,000. New monthly payment on $320,000 at 6.5% for 360 months: $2,022.62. Total of payments: $728,143, meaning $408,143 of total interest over 30 years. If the $72,000 wipes out $72,000 of credit card debt at 24%, you trade roughly $17,280 a year of card interest for about $4,680 a year of mortgage interest on that portion: a clear win, provided the cards stay paid off.
Cash-Out vs Alternatives
| Option | Best when | Watch out |
|---|---|---|
| Cash-out refinance | Large one-time need, rates favorable | Resets amortization, closing costs |
| HELOC | Ongoing draws, keep low first-mortgage rate | Variable rate, draw discipline needed |
| Home equity loan | Fixed second payment, keep first mortgage | Higher rate than first lien |
| Personal loan | Small amount, want no lien on home | Much higher rate |
The deciding factor is usually your existing first-mortgage rate. If you locked 3% years ago, a cash-out refinance destroys that rate; a HELOC or home equity loan preserves it. If your current rate is already near market, the cash-out refinance is cleaner: one payment, fixed rate, done. Either way, compare the true APR including costs using our APR calculator, check the rate-only trade with our refinance break-even calculator, and size the payment with our mortgage calculator.
Estimates for planning only, not financial advice.
Frequently Asked Questions
What is a cash-out refinance?
A cash-out refinance replaces your current mortgage with a larger one and gives you the difference in cash. Owe $240,000 on a $400,000 home and refinance into a $320,000 loan at 80% loan-to-value: you receive roughly $80,000 minus closing costs. It converts home equity into cash at mortgage interest rates, which are far lower than personal loan or credit card rates.
How much cash can I get from a cash-out refinance?
Conventional loans generally cap the new loan at 80% of the home's appraised value, so maximum cash is 80% of value minus your current balance and closing costs. On a $400,000 appraisal with a $240,000 balance: $320,000 max loan minus $240,000 owed = $80,000 gross, minus roughly $6,000 to $10,000 in closing costs. FHA allows up to 80% as well; VA loans can go to 100% for eligible borrowers.
What are the closing costs on a cash-out refinance?
Typically 2% to 5% of the new loan amount: origination fees, appraisal, title insurance, and recording charges. On a $320,000 loan, expect $6,400 to $16,000, often rolled into the new balance, which reduces your net cash. Lenders must disclose all costs on the Loan Estimate within 3 business days of application: compare the APR, not just the rate, across offers.
Is cash-out refinance interest tax deductible?
Only if the cash is used to buy, build, or substantially improve the home securing the loan. Cash used for debt consolidation, tuition, or investments is not deductible under current law. Keep records of how you spend the proceeds; the IRS follows the use of the money, not the label on the loan. This is a common and expensive misunderstanding.
What is the loan-to-value (LTV) limit?
Most conventional cash-out refinances cap at 80% LTV, meaning you must keep 20% equity in the home. That 20% cushion protects the lender if prices fall and protects you from owing more than the home is worth. Some programs go higher with mortgage insurance, but the pricing gets worse fast above 80%. This calculator flags any scenario exceeding 80% LTV.
How does cash-out refinancing affect my monthly payment?
Three forces move it: the new (larger) loan balance pushes it up, the new interest rate pushes it up or down, and the new term resets the amortization clock. In the worked example, borrowing $320,000 at 6.5% for 30 years costs $2,022.62 a month. Compare against your current payment and against the total interest over the full new term, not just the monthly figure.
When does a cash-out refinance make sense?
When the cash funds something with a return above the mortgage rate: high-interest debt consolidation (replacing 24% credit card debt with 7% mortgage debt), value-adding renovations, or education that raises earnings. It makes less sense for depreciating purchases like cars or vacations, where you convert short-term spending into 30 years of interest. Run the total-interest math before deciding.
What are the risks of a cash-out refinance?
You are converting unsecured or short-term obligations into debt secured by your home: default now risks foreclosure. You reset the amortization clock, so early payments are mostly interest again. Closing costs eat several thousand dollars. And if home values fall, the thinner equity cushion can leave you underwater. The cash feels free; the 30-year cost is not.
How long does a cash-out refinance take?
Typically 30 to 45 days from application to funding, including appraisal, underwriting, and the 3-day right-of-rescission period after closing for primary residences. Rate locks usually run 30 to 60 days; if your lock expires before closing, you may pay extension fees or lose the rate. Start the process before you need the cash, not after.
What is the difference between cash-out refinance and HELOC?
A cash-out refinance replaces your entire mortgage with a new fixed-rate loan and a lump sum of cash. A HELOC is a separate revolving credit line against your equity, usually with a variable rate, that leaves your first mortgage untouched. Cash-out refis suit large one-time needs when rates are favorable; HELOCs suit ongoing or uncertain draws and preserve a low existing first-mortgage rate.