Cash-Out Refinance Calculator
Estimate your new mortgage payment, cash received, and refinance costs with a cash-out refinance.
What Is a Cash-Out Refinance?
A cash-out refinance replaces your existing mortgage with a new loan for more than you currently owe. You receive the difference between the new loan amount and your existing mortgage balance as cash at closing. This strategy lets you convert a portion of your home equity into liquid funds while resetting your mortgage terms.
This calculator estimates your new monthly payment, the cash you can expect to receive, and the closing costs associated with the refinance. It helps you evaluate whether a cash-out refinance aligns with your financial goals before committing to the process.
How the Calculator Works
The calculator uses standard mortgage math to project your refinance outcome. It accounts for your current loan balance, home value, desired cash amount, new interest rate, loan term, and estimated closing costs.
Key calculations include:
- Maximum loan amount — Based on your home's value and the lender's maximum loan-to-value (LTV) ratio, typically 80% for conventional loans.
- Cash received — The new loan amount minus your existing balance and estimated closing costs.
- New monthly payment — Calculated using the new loan amount, interest rate, and term.
The tool assumes a standard amortizing loan structure. It does not account for private mortgage insurance (PMI), property taxes, or homeowners insurance unless you include them manually.
How to Use This Calculator
- Enter your current loan balance — The remaining principal on your existing mortgage.
- Enter your home's current value — A realistic estimate based on recent comparable sales or an appraisal.
- Enter the cash amount you want — The funds you intend to receive at closing.
- Enter the new interest rate — Use current market rates for your credit profile and loan type.
- Enter the new loan term — Typically 15, 20, or 30 years.
- Enter estimated closing costs — Usually 2% to 5% of the new loan amount.
Adjust any input to see how changes affect your cash proceeds and monthly payment.
Understanding Your Results
The calculator displays three primary outputs:
- New monthly payment — Your projected principal and interest payment under the new loan. This may be higher or lower than your current payment depending on rate and term changes.
- Cash received — The net cash you receive after paying off your existing mortgage and covering closing costs. This is the amount available for your intended use.
- Total refinance costs — The estimated closing costs deducted from your cash proceeds.
If the calculator shows that your desired cash amount exceeds the maximum allowed by LTV limits, it will indicate that the request is not feasible without a higher LTV allowance or a larger home value.
Common Mistakes to Avoid
- Overestimating home value — Using an inflated home value leads to unrealistic cash projections. Use a conservative estimate or recent appraisal.
- Ignoring closing costs — Closing costs reduce the cash you actually receive. Failing to account for them can leave you short of your target amount.
- Focusing only on monthly payment — A lower monthly payment may extend your loan term, increasing total interest paid over time.
- Assuming you qualify for the maximum LTV — Lender requirements vary. A lower credit score or higher debt-to-income ratio may reduce the maximum loan amount.
Limitations of This Calculator
This calculator provides estimates only. Actual results depend on lender underwriting, appraisal outcomes, credit qualification, and specific loan program rules. It does not account for:
- Private mortgage insurance (PMI) or mortgage insurance premiums (MIP)
- Property taxes and homeowners insurance
- Prepayment penalties on your existing loan
- Rate lock fees or discount points
- State-specific closing cost variations
Consult a licensed mortgage professional for a personalized assessment before proceeding with a cash-out refinance.
Practical Use Cases
- Home improvements — Fund renovations that increase property value or address necessary repairs.
- Debt consolidation — Pay off high-interest credit card debt or personal loans with lower-rate mortgage debt.
- Major purchases — Finance large expenses such as education, medical bills, or a down payment on an investment property.
- Investment — Access equity for business ventures or other investment opportunities.
Each use case carries different risk profiles. Evaluate whether the long-term cost of refinancing justifies the immediate benefit of accessing cash.
FAQ
How much cash can I get from a cash-out refinance?
The amount depends on your home's value, your existing loan balance, and the lender's maximum LTV ratio. Typically, you can access up to 80% of your home's value, minus your current mortgage balance and closing costs. For example, a $400,000 home with a $250,000 loan balance could yield up to $70,000 in cash, assuming 80% LTV and 3% closing costs.
Is cash-out refinance the same as a home equity loan?
No. A cash-out refinance replaces your entire mortgage with a new, larger loan. A home equity loan is a second mortgage that leaves your original loan in place. Cash-out refinances typically offer lower rates than home equity loans but reset your loan term and may increase total interest.
Will my monthly payment increase with a cash-out refinance?
Not necessarily. If you secure a lower interest rate or extend your loan term, your monthly payment could decrease even with a larger loan balance. However, borrowing more money generally increases your payment if the rate and term remain similar. Use the calculator to compare your current payment with the projected new payment.
What credit score do I need for a cash-out refinance?
Requirements vary by lender and loan type. Conventional loans typically require a minimum credit score of 620, while FHA cash-out refinances may accept scores as low as 500 with a larger down payment. Higher scores generally qualify for better rates and higher LTV limits.
Are cash-out refinance closing costs tax deductible?
Closing costs are generally not deductible in the year you pay them. However, points paid to reduce your interest rate may be deductible over the life of the loan. Consult a tax professional for guidance specific to your situation.