$305,000.00
$45,000.00
67.78
%
$145,000.00
$1,535.22
$1,978.22
$443.01
5,000
months
$210,565.62
$407,160.71
$196,595.09
$6.49
$305,000.00
$45,000.00
67.78
%
$145,000.00
$1,535.22
$1,978.22
$443.01
5,000
months
$210,565.62
$407,160.71
$196,595.09
$6.49
The Cash-Out Refinance Calculator helps you evaluate the costs and benefits of refinancing your mortgage for more than you owe and taking the difference as cash. Cash-out refinancing replaces your existing mortgage with a larger one, giving you access to your home equity as a lump sum.
For example, if your home is worth $450,000 and you owe $250,000, you have $200,000 in equity. A cash-out refinance might replace your $250,000 mortgage with a $300,000 mortgage, giving you $50,000 in cash (minus closing costs). The new loan has a new rate and term.
Most lenders require maintaining at least 20% equity after the cash-out (maximum 80% LTV). VA loans allow up to 100% LTV for cash-out refinancing. The new loan amount is your current balance plus the cash-out amount, and closing costs typically run 2-5% of the new loan amount.
Cash-out refinancing makes sense when you need funds for home improvements (which can increase your home's value), high-interest debt consolidation (if the new rate is lower than your current debts), or major expenses like education. However, it increases your mortgage balance and may increase your payment, and it resets your amortization schedule.
Compare a cash-out refinance against alternatives like a HELOC or home equity loan. Those options keep your current mortgage intact (beneficial if your current rate is low) while providing access to equity through a second lien. If your current rate is significantly lower than today's rates, a second lien is often a better choice.
New Loan Amount = Current Balance + Cash Out
New LTV = New Loan ÷ Home Value × 100
Payments use: M = P × [r(1+r)n] / [(1+r)n − 1]
Payment Change = New Payment − Current Payment
Total interest for each scenario = Payment × Months − Principal.
The new LTV should stay below 80% to avoid PMI and qualify for the best rates. The payment change shows the monthly cost impact. Total interest comparison reveals the long-term cost — remember that even a lower rate can result in more total interest if the new term is longer and the balance is higher.
Inputs
Results
Payment increases $400/month. New loan costs $187K more in total interest.
Inputs
Results
LTV remains conservative at 62.5%. Consider if renovation adds equivalent value.
A cash-out refinance replaces your existing mortgage with a larger loan and you receive the difference as cash. It lets you access home equity without selling your home.
Most lenders allow a maximum LTV of 80% for cash-out refinances. On a $450,000 home, you could borrow up to $360,000. Subtract your current balance to find the available cash.
Typically 2-5% of the new loan amount. On a $300,000 loan, expect $6,000-$15,000 in closing costs. These can sometimes be rolled into the new loan.
If your current rate is high and you can get a lower rate, cash-out refinance can be better. If your current rate is low, a HELOC preserves your good rate on the existing loan. HELOCs also have lower closing costs.
Cash received is not taxable income. Interest on the new loan is deductible only for the portion used for home improvements. Consult a tax professional for your specific situation.
Yes, but maximum LTV is typically lower (70-75%) and rates are higher. Lenders view investment property cash-out refinances as higher risk.
You need at least 20% equity remaining after the cash-out. If your home is worth $400,000, the new loan cannot exceed $320,000 (80% LTV).
Usually yes, because the new loan is larger. The payment may also increase if the new rate is higher. However, if rates have dropped significantly, the payment could decrease even with cash out.
Typically 30-45 days from application to closing, similar to a regular refinance. The process includes appraisal, underwriting, and title work.
It can make sense if your high-interest debts (credit cards at 20%+) exceed the new mortgage rate (6-7%). However, you are converting unsecured debt to secured debt — if you default, you could lose your home.
Roboculator Team
The Roboculator Team explains calculations, planning tools, and practical formulas in clear language for real-life situations.
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