Cash-Out Refinance Calculator

How the cash-out refinance calculator works

A cash-out refinance replaces your existing mortgage with a brand-new, bigger loan. You pay off the old balance, and the lender hands you the extra amount as cash you can spend. In exchange, you owe more on the home and start a fresh payment schedule. The key question is how big the new loan becomes, what it costs each month, and how much equity you have left afterward.

The new loan amount is straightforward to build: new loan = current balance + cash taken out + any closing costs you roll in. If you pay the closing costs out of pocket instead, they are left out of the loan and your balance stays a little lower. The monthly principal-and-interest payment then comes from the standard amortization formula applied to that new balance, at your new rate, over the new term.

Lenders measure your risk with loan-to-value, or LTV: LTV = new loan ÷ home value. Cash-out refinances are almost always capped at 80% LTV on a primary residence, which means you must keep at least 20% equity in the home. The calculator shows your resulting LTV and an estimate of the most cash you could pull while staying at or below that 80% line. Cross above 80% and you typically face a higher rate and added mortgage insurance, if a lender will approve it at all.

A worked example

Take the defaults: a home worth $500,000, a current balance of $280,000, you want $50,000 in cash, your new rate is 6.25% over 30 years, and you roll $6,000 of closing costs into the loan:

• New loan amount = $280,000 + $50,000 + $6,000 = $336,000.
• New monthly payment at 6.25% for 30 years is about $2,069/month.
• LTV = $336,000 ÷ $500,000 = 67.2% — comfortably under the 80% cap.
• Cash in your pocket is the $50,000 you requested (the rolled costs are financed, not handed to you).
• At 80% LTV you could borrow up to $400,000, so there is room to take more cash if you wanted.

Because the LTV sits well below 80%, this is a clean, conventional cash-out. But notice that restarting at 30 years stretches the whole balance out again, so the lifetime interest can be substantial — read that row before you decide.

What affects your result

• Your new rate. Cash-out loans usually carry a slightly higher rate than a no-cash refinance. A higher rate raises both the monthly payment and the total interest.
• How much cash you take. Every dollar of cash adds to the loan balance, the payment, and your LTV. Taking less keeps you further from the 80% ceiling.
• The 80% LTV cap. Your home value sets a hard limit on borrowing. If the cash you want pushes LTV above 80%, expect a higher rate, mortgage insurance, or a denial.
• Closing costs. Rolling fees into the loan means no cash up front but a higher balance and more interest. Paying them up front keeps the loan smaller.
• Lifetime interest from resetting the term. A fresh 30-year term lowers the payment but can dramatically increase total interest. A shorter term costs more monthly but far less overall.

Frequently asked questions

How much cash can I get from a cash-out refinance?

Most lenders cap a cash-out refinance at 80% of your home value, meaning you must keep at least 20% equity. Take your home value, multiply by 0.80, then subtract your current mortgage balance (and any closing costs you roll in). The result is roughly the maximum cash you can take. With a $500,000 home and a $280,000 balance, 80% is $400,000, so about $120,000 of gross borrowing room before costs.

What is loan-to-value (LTV) and why does it matter?

LTV is your loan amount divided by your home value, written as a percentage. A $336,000 loan on a $500,000 home is 67.2% LTV. Lenders use LTV to price your rate and decide how much they will lend. Cash-out refinances are usually capped at 80% LTV, and going above that line typically means a higher rate and mortgage insurance.

How is a cash-out refinance different from a HELOC?

A cash-out refinance replaces your entire mortgage with one new, larger loan at a single fixed (or adjustable) rate. A HELOC leaves your existing mortgage in place and adds a second line of credit you draw on as needed, usually at a variable rate. Compare both with the cash-out refinance calculator here and the HELOC calculator at /heloc-calculator/.

Do I pay income tax on the cash I take out?

No. The cash from a cash-out refinance is borrowed money, not income, so it is not taxable. You are simply taking on more debt against your home. Note that the mortgage interest deduction rules can change depending on how you use the funds, so check current IRS guidance or a tax professional if you plan to deduct interest.

Does a cash-out refinance reset my loan term?

Usually yes. Refinancing into a fresh 30-year loan restarts the clock, which lowers the monthly payment but stretches the balance over more years. That can mean paying far more total interest, even at a similar rate. This calculator shows total lifetime interest so you can see the long-term cost, not just the monthly figure.

Is the cash safe to spend on anything?

Legally you can use it for anything, but be careful. A cash-out refinance turns the borrowed amount into mortgage debt secured by your home, repaid over decades. Using it to consolidate short-term or unsecured debt can lower your rate but extend the payoff for years and put your house on the line if you cannot keep up.

Related tools

Compare a standard rate-and-term refinance with the refinance calculator, weigh a line of credit with the HELOC calculator, price a fixed second mortgage with the home equity loan calculator, and estimate your fees with the closing cost calculator.