Why Consider a Cash-Out Refinance?
As your home appreciates and you pay down your mortgage, you build equity—and that equity can be put to work. A cash-out refinance replaces your existing mortgage with a new, larger one. The new loan pays off your old balance, and the difference comes to you as cash at closing.
Homeowners typically use this cash for:
- Home renovations — kitchen remodels, additions, or energy upgrades
- Debt consolidation — paying off high-interest credit cards or personal loans
- Major purchases — education, medical expenses, or investment opportunities
But before you leap, it’s important to know the numbers: How much can you actually get? What will your new monthly payment be? How much equity will you have left?
Our calculator answers all of that—instantly and privately.
How It Works (Made Simple)
Step 1: What’s Your Maximum Loan?
Lenders typically cap your total loan at 80% of your home’s appraised value (85% for VA loans). That means you must keep at least 20% equity in your home after the refinance.
Maximum Loan = Home Value × Maximum LTV Percentage
Step 2: How Much Cash Could You Get?
Cash-Out Payout = Maximum Loan − Your Existing Mortgage Balance
Step 3: What Will Your New Payment Be?
Your new loan amount, interest rate, and term determine your new monthly principal and interest payment—which we calculate for you instantly.
Real-World Scenarios: See What’s Possible
| Home Value | Current Mortgage Balance | Max LTV | Max New Loan | Cash You Could Get | New Rate & Term | New Monthly Payment | Equity You Keep |
|---|---|---|---|---|---|---|---|
| $350,000 | $180,000 | 80% | $280,000 | $100,000 | 6.50% (30 Yr) | $1,770 | $70,000 |
| $450,000 | $250,000 | 80% | $360,000 | $110,000 | 6.50% (30 Yr) | $2,275 | $90,000 |
| $450,000 | $250,000 | 85% (VA) | $382,500 | $132,500 | 6.50% (30 Yr) | $2,418 | $67,500 |
| $650,000 | $320,000 | 80% | $520,000 | $200,000 | 6.75% (30 Yr) | $3,373 | $130,000 |
| $900,000 | $450,000 | 80% | $720,000 | $270,000 | 6.25% (15 Yr) | $6,177 | $180,000 |
The numbers don’t lie—a cash-out refinance can put significant capital in your hands while keeping your home as your biggest asset.
How to Use This Calculator
Getting your personalized cash-out estimate is quick and easy:
- Enter your home’s appraised value — what’s your home worth today?
- Enter your current mortgage balance — what you still owe on your existing loan.
- Select your maximum LTV — typically 80% for conventional loans, or 85% for VA loans.
- Enter your new interest rate and term — what rate are you qualifying for, and do you want a 15 or 30-year term?
- View your results instantly — maximum cash payout, new monthly payment, and retained home equity.
Who Benefits From This Calculator?
This cash-out refinance tool is perfect for:
- Homeowners — considering tapping into their home equity
- Savers — looking to consolidate high-interest debt
- Renovators — planning major home improvements
- Anyone — wanting to see the numbers before committing to a refinance
Common Questions About Cash-Out Refinances
What is a cash-out refinance in plain English?
It’s when you replace your current mortgage with a new, larger mortgage. The new loan pays off what you owe, and you get the remaining balance in cash at closing. Your mortgage balance goes up, but you get cash in hand to use for whatever you need.
What’s the maximum I can borrow?
Most conventional lenders cap cash-out refinances at 80% of your home’s appraised value (LTV). That means you must keep at least 20% equity in your home after the refinance. VA loans sometimes allow up to 85%.
Is the cash I get taxable?
No. The cash you receive from a cash-out refinance is borrowed money, not income. It’s not subject to income tax—though you’re borrowing against your home, so you’ll pay interest on it over time.
What’s the difference between a cash-out refinance and a HELOC?
- Cash-out refinance — replaces your primary mortgage with a single new loan. You get cash at closing and have one monthly payment.
- HELOC (Home Equity Line of Credit) — adds a second revolving credit line alongside your existing mortgage. You can draw from it as needed, like a credit card.
What closing costs are involved?
Typical closing costs range from 2% to 5% of the new loan amount. These include appraisal fees, origination fees, title insurance, and escrow costs. It’s worth getting quotes from multiple lenders.
Can I deduct the interest on my taxes?
Yes—but only if the cash proceeds are used to buy, build, or substantially improve your home. If you use the money for other purposes (like paying off credit card debt), the interest is not tax-deductible.
Is my financial data private?
Absolutely. All calculations run entirely in your browser. No home values, mortgage balances, or financial details are ever stored or transmitted. Your home equity planning stays between you and your screen.
🏠 Quick Tip: A cash-out refinance can be a powerful tool—but it’s important to use the funds wisely. Consider whether the new payment fits your budget, and make sure the cash is going toward something that improves your financial picture long-term.