Cash-Out Refinance Calculator
See how much cash you can take out of your home with a cash-out refinance, your new loan amount and payment, and how it compares with your current mortgage.
Results
| Item | Value |
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Quick Answer
Cash available = home value × maximum loan-to-value − your mortgage balance − closing costs added to the loan. With a $400,000 home, an 80% limit and a $220,000 balance, you could borrow up to $320,000, so about $94,000 in cash after $6,000 of costs. Taking $50,000 makes the new loan $276,000, which is $1,744.51 a month over 30 years at 6.5%.
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Table of Contents
- Cash-Out Refinance Calculator
- Quick Answer
- Related Calculators
- How This Cash-Out Refinance Calculator Works
- How to Use the Cash-Out Refinance Calculator
- Cash-Out Refinance Formulas
- Key Terms
- Worked Example
- Real-Life Examples
- Cash-Out Refinance vs HELOC
- Cash Available by Home Value
- Rules Lenders Check
- Common Mistakes to Avoid
- Frequently Asked Questions
- References & Sources
How This Cash-Out Refinance Calculator Works
A cash-out refinance replaces your mortgage with a bigger one and gives you the difference in cash. Enter your home value, what you owe, the lender’s maximum loan-to-value (LTV), the cash you want, and the new rate and term. The calculator shows the most cash you can take, the new loan amount, your new payment and how much equity you keep.
Quick explanation: lenders only lend up to a share of your home’s value.
- LTV: loan ÷ home value. An 80% limit on a $400,000 home allows a $320,000 loan.
- Cash out: the new loan minus your current balance and any costs added to it.
- Leave the cash box at 0 to see the most you can take.
How to Use the Cash-Out Refinance Calculator
- Enter your home value and current mortgage balance.
- Optionally, enter your current monthly principal and interest payment.
- Enter the lender’s maximum loan-to-value and the cash you want (0 for the most).
- Enter the new rate, term and closing costs, and choose how to pay the costs.
- Press Calculate to see the cash, new loan, payment and equity.
Cash-Out Refinance Formulas
- Maximum loan: home value × maximum LTV
- Most cash available: maximum loan − current balance − closing costs added to the loan
- New loan: current balance + cash out + closing costs added to the loan
- Monthly payment: loan × r ÷ (1 − (1 + r)^−n), with r = rate ÷ 12 and n = years × 12
- Equity left: home value − new loan
Key Terms
- Cash-out refinance: a new, larger mortgage that pays off the old one and gives you the difference in cash.
- Loan-to-value (LTV): the loan amount divided by the home’s value.
- Equity: the part of the home’s value you own: value minus what you owe.
- Closing costs: fees for the new loan, such as appraisal, title and lender charges.
- Appraisal: a professional estimate of the home’s value ordered by the lender.
Worked Example
Your home is worth $300,000 and you owe $150,000. Your lender allows 80% LTV. You want $60,000 for a renovation, at 6.75% over 20 years, and you will pay $5,000 of closing costs in cash.
- Maximum loan = $300,000 × 80% = $240,000
- Most cash available = $240,000 − $150,000 = $90,000
- New loan = $150,000 + $60,000 = $210,000
- New payment = $1,596.76 a month, leaving $90,000 of equity
Real-Life Examples
- Renovation: taking $50,000 from a $400,000 home with $220,000 owed gives a $276,000 loan at $1,744.51 a month.
- Debt payoff: $30,000 of card debt at 22% moved into a 6.5% mortgage costs about $190 a month over 30 years, but much more total interest than paying it off in 3 years.
- Maximum cash: a $500,000 home with $250,000 owed at 80% LTV has up to $150,000 available before costs.
- Shorter term: the $210,000 loan in the worked example costs $1,597 a month over 20 years, against $1,362 over 30.
Cash-Out Refinance vs HELOC
- Cash-out refinance: one new first mortgage with a fixed or adjustable rate. Good when new rates are close to or below your current rate.
- HELOC or home equity loan: a second loan on top of your mortgage, so you keep your current rate. Often better if your current rate is low.
- Costs: a refinance usually has higher closing costs than a HELOC.
Cash Available by Home Value
Before closing costs.
| Home value | Owe $100,000 | Owe $200,000 | Owe $300,000 |
|---|---|---|---|
| $250,000 | $100,000 | $0 | $0 |
| $300,000 | $140,000 | $40,000 | $0 |
| $400,000 | $220,000 | $120,000 | $20,000 |
| $500,000 | $300,000 | $200,000 | $100,000 |
| $600,000 | $380,000 | $280,000 | $180,000 |
Rules Lenders Check
Fannie Mae’s Selling Guide, which sets rules for many conventional loans, says an existing first mortgage being paid off must be at least 12 months old, and at least one borrower must have been on the title for at least six months before the new loan is made. Maximum LTV ratios and credit score rules are in its Eligibility Matrix and depend on the property and loan. FHA and VA cash-out loans have their own limits; a VA loan may also carry a funding fee.
Lenders also look at your credit score, debt-to-income ratio and cash reserves, and they will order an appraisal to confirm the home’s value.
Common Mistakes to Avoid
- Using a guess for home value. The lender’s appraisal sets the value, and it may be lower.
- Forgetting closing costs. Rolled-in costs reduce the cash you receive.
- Swapping a low rate for a higher one. All of your balance moves to the new rate.
- Resetting to 30 years without thinking. A longer term can add a lot of interest.
- Turning short-term debt into 30-year debt. Lower payments can cost more overall.
Frequently Asked Questions
Multiply your home value by the lender’s maximum LTV, then subtract what you owe and any costs added to the loan.
It depends on the loan type, property and credit. Conventional limits are set in Fannie Mae and Freddie Mac rules; ask your lender.
Fannie Mae’s guide says a first mortgage being paid off must be at least 12 months old, and a borrower must have been on title for six months.
Usually, because the loan is bigger. The calculator shows the change.
Closing costs are similar to other refinances, and some lenders price cash-out loans a little higher.
Generally yes, such as renovations, debt payoff or tuition, but it is secured by your home.
It depends on rates: if your current rate is low, a HELOC may cost less.
Loan proceeds are not income, but interest deductions depend on how you use the money. Ask a tax professional.
Usually yes, because the cash available depends on the home’s value.
References & Sources
| Source | Used For | Link |
|---|---|---|
| Fannie Mae Selling Guide, B2-1.3-03 Cash-Out Refinance Transactions | Seasoning, ownership and Eligibility Matrix rules for cash-out refinances. | https://selling-guide.fanniemae.com/sel/b2-1.3-03/cash-out-refinance-transactions |
| U.S. Department of Veterans Affairs, Cash-out refinance loan | VA-backed cash-out refinance and the funding fee. | https://www.va.gov/housing-assistance/home-loans/loan-types/cash-out-loan/ |
| OpenStax, Contemporary Mathematics, 6.8 The Basics of Loans | Loan payment formula. | https://openstax.org/books/contemporary-mathematics/pages/6-8-the-basics-of-loans |