Cash-Out Refinance Calculator

Most conventional cash-out refinances cap loan-to-value at 80% of appraised home value. On a $500,000 home, that's a maximum new loan of $400,000 - minus your existing balance and closing costs, the rest is cash to you. VA cash-out can go up to 100% LTV; FHA cash-out is capped at 80% LTV (as of 2019).

When you need a large sum, want a fixed long-term rate, and current mortgage rates are at or below your existing rate. It can be cheaper than a HELOC or home equity loan for very large draws. It rarely makes sense purely to lower rate by less than 0.75%, since closing costs (2%–5% of loan) erode the savings.

Cash-out refinance closing costs typically run 2%–5% of the new loan amount, covering origination, appraisal, title insurance, recording, and prepaid escrows. On a $400,000 loan, that's $8,000–$20,000 - often rolled into the loan, which slightly reduces cash to the borrower and increases long-term interest.

Divide total closing costs by monthly payment savings (if applicable) or compare total interest paid vs the prior loan. If you take cash out at a higher rate than your old mortgage, there is no monthly savings - the "break-even" is really about whether the cash use generates more value than the additional interest cost.

It's a process where you replace your current mortgage with a larger loan. The difference between the new loan and your existing balance (minus closing costs) comes to you as cash, which you can use for home improvements, debt consolidation, or other purposes.

Only on the portion of the loan used to buy, build, or improve the home that secures it. Interest on cash taken out for other purposes (vacations, paying off credit card debt, etc.) is generally not deductible. Check with a tax advisor.

Usually 30 to 45 days, similar to any refinance. It requires a home appraisal, income verification, credit review, and title search. After closing, the 3 business-day rescission period applies before you receive the cash.

A HELOC has variable rates and more flexibility (you only pay interest on what you use), but the risk of rising rates can be high. A cash-out refinance gives a predictable fixed payment at a fixed rate, but has higher closing costs. It's worth it when the refinance rate is good and you need the money in a single lump sum.