Cash Out Refinance Calculator
See how much cash you could take from your home equity, what you would receive after closing costs, and how your monthly mortgage payment would change.
Principal and interest only. Taxes, insurance and any mortgage insurance are extra. Rates and limits depend on your lender, credit and loan type.
How a cash-out refinance works
A cash-out refinance replaces your current mortgage with a new, larger one. The new loan pays off your old balance, and you receive the difference in cash, minus closing costs. You then make one monthly payment on the new loan.
The monthly payment uses the standard mortgage formula, where r is the monthly interest rate and n is the number of monthly payments:
Worked example: $50,000 from a $400,000 home
Say your home is worth $400,000, you owe $200,000, and your current principal and interest payment is $1,500 a month. You want $50,000 in cash on a new 30-year loan at 6.5%, with closing costs of 3%.
- New loan: $200,000 + $50,000$250,000
- Loan-to-value: $250,000 ÷ $400,00062.5%
- Closing costs: 3% of $250,000$7,500
- Cash in hand: $50,000 − $7,500$42,500
- New payment at 6.5% for 30 years$1,580.17
Your payment rises by about $80 a month. At an 80% limit, you could have taken up to $120,000 ($320,000 − $200,000). Keep in mind that the new loan starts a fresh 30-year term, so you may pay interest for longer than you would on your current mortgage.
How much cash can you take out?
Lenders limit how much of your home’s value you can borrow against. This limit is called the maximum loan-to-value (LTV). For most conventional and FHA cash-out refinances on a primary home, the limit is 80%, which means you must keep at least 20% equity in the home.
VA cash-out refinances for eligible veterans and service members can allow a higher LTV, though many lenders set their own caps. Investment properties and second homes usually have lower limits. Ask your lender which limit applies to you and enter it in the calculator.
Your home’s value is set by an appraisal, not by your own estimate. If the appraisal comes in lower, the most cash you can take drops too.
Costs and risks to weigh
Closing costs on a refinance often run around 2% to 5% of the new loan amount. They can include lender fees, an appraisal, title insurance and recording fees. The calculator subtracts them from your cash, which is how many lenders handle them.
Your home secures the new loan. If you use the cash for spending you cannot repay, you could put the home at risk. Resetting to a new 30-year term can also raise the total interest you pay, even when the monthly payment looks affordable. If your current rate is much lower than today’s rates, a home equity loan or HELOC may cost less, because it leaves your existing mortgage in place.
Monthly payment per $100,000 borrowed
Principal and interest for every $100,000 of loan amount. Multiply by your loan size in hundreds of thousands for a quick estimate.
| Interest rate | 30-year loan | 15-year loan |
|---|---|---|
| 5.0% | $536.82 | $790.79 |
| 5.5% | $567.79 | $817.08 |
| 6.0% | $599.55 | $843.86 |
| 6.5% | $632.07 | $871.11 |
| 7.0% | $665.30 | $898.83 |
| 7.5% | $699.21 | $927.01 |
Frequently asked questions
Is cash from a cash-out refinance taxable?
Generally no. The money is loan proceeds that you must repay, not income, so it is not taxed as income.
Is the mortgage interest on the cash portion tax-deductible?
Only in some cases. Interest on the cash-out portion is generally deductible only if you itemize and use the money to buy, build or substantially improve the home that secures the loan. Interest on cash used for other purposes, such as paying off credit cards, generally is not. Check current IRS rules or ask a tax professional.
How much equity do I need to keep?
For most conventional and FHA cash-out refinances, you need to keep at least 20% equity, because the new loan is capped at 80% of the home’s value. VA loans can allow more.
Is a cash-out refinance worth it if rates are higher than my current rate?
It can be expensive. The higher rate applies to your whole balance, not just the new cash. Compare the extra lifetime interest with the cost of a home equity loan or HELOC, which borrows only the amount you need.
Does a cash-out refinance reset my loan term?
Yes. You take a brand-new loan, usually for 15, 20 or 30 years. Choosing a shorter term lowers total interest but raises the monthly payment.
This calculator is for educational purposes only and is not financial, tax or legal advice. Actual rates, fees, appraisal values and borrowing limits depend on your lender and your situation.