Cash-Out Refinance Calculator 2026
See how much equity you can tap, your new monthly payment, and whether cash-out refinancing beats a HELOC or personal loan for your situation. Instant results — no sign-up.
Calculate Your Cash-Out Options
Enter your home's value and current loan details to see your available equity and new payment.
Cash-Out Refinance vs. HELOC vs. Personal Loan
Before committing to a cash-out refinance, compare it against the alternatives. The right choice depends on your existing mortgage rate, how much equity you need, and how long you plan to keep the loan.
| Factor | Cash-Out Refi | HELOC | Personal Loan |
|---|---|---|---|
| Rate type | Fixed | Variable (prime-based) | Fixed |
| Typical rate (2026) | 6.5–7.5% | 8.5–10.5% (variable) | 10–24% |
| Max amount | Up to 80–90% of home value | Up to 85–90% CLTV | $5K–$100K typically |
| Replaces existing mortgage | Yes | No (sits on top) | No |
| Closing costs | 2–5% of new loan | Low/none | None (origination fee) |
| Best for | Replacing a high-rate mortgage AND accessing equity | Flexible, ongoing access; current mortgage rate is good | Small amounts, fast funding, no home equity needed |
| Risk | Home is collateral — foreclosure risk | Home is collateral — foreclosure risk | No home at risk |
| Interest deductibility | Yes, if used for home improvement | Yes, if used for home improvement | No |
If your current mortgage rate is below 6%, a cash-out refinance replaces that low rate with a higher one on your entire balance — often costing you thousands more in interest even if you get the cash you need. In that case, a HELOC on top of your existing mortgage is almost always the better choice. The break-even math matters here: run the numbers before deciding.
How Much Can You Cash Out?
Lenders cap the new loan at a percentage of the home's appraised value, called the Loan-to-Value (LTV) ratio. Most programs use 80% LTV as the ceiling.
The formula: Maximum cash = (Home value × Max LTV) − Current mortgage balance − Closing costs
Example: Home worth $450,000. You owe $220,000. At 80% LTV, max new loan = $360,000. Subtract $220,000 balance and $8,000 in estimated closing costs → maximum cash = ~$132,000.
LTV Limits by Program
- Conventional: Maximum 80% LTV. Must retain 20% equity. Best rates at 70% LTV or below.
- FHA cash-out: Maximum 80% LTV. Requires full appraisal and income underwriting. MIP continues.
- VA cash-out: Maximum 90% LTV (subject to VA entitlement). No PMI. Funding fee applies (2.15% first use, 3.3% subsequent).
- Jumbo cash-out: Lender-specific, usually 70–75% LTV. Stricter credit and reserves requirements.
When Cash-Out Refinancing Makes Sense
Cash-out refinancing is genuinely the right tool in these scenarios:
- Major home improvements that add value — kitchen renovations, room additions, and roof replacements increase your home's appraised value, building back the equity you spent. The interest may also be tax-deductible if you itemize.
- Replacing a high-rate mortgage at the same time — if your current rate is already high and you need cash, combining both goals into one cash-out refinance eliminates two transactions and two sets of closing costs.
- Consolidating high-interest debt with discipline — replacing 20% credit card debt with 7% mortgage debt saves thousands in interest, but only if you don't run up new balances. This requires addressing the root spending behavior, not just restructuring the math.
- Funding education expenses — mortgage rates are typically far below private student loan rates. If your equity is strong and you'll stay in the home, this can be cost-effective.
When Cash-Out Refinancing Is the Wrong Move
- Your current mortgage rate is low. Refinancing from a 4% mortgage to a 7% mortgage on your full balance to access equity is almost never financially sensible. The rate increase on your existing balance far outweighs the benefit of the cash.
- You're consolidating debt without changing spending habits. Converting credit card balances to mortgage debt extends them to 30 years and puts your home at risk if you can't pay. The same behavior that created the debt will recreate it.
- You're close to paying off your mortgage. If you only have 5–8 years left, cashing out and resetting to a 30-year loan costs enormously more in total interest.
- You might sell in the next few years. Closing costs of $8,000–$20,000 on a cash-out refinance take years to justify. If you're selling soon, the net cash benefit shrinks dramatically.
- You're in financial distress. Using home equity to cover day-to-day living expenses is a warning sign, not a solution. It depletes the asset you need most and risks foreclosure if the underlying situation doesn't improve.
A cash-out refinance puts your home at risk as collateral for the increased debt. Missing payments on a secured mortgage loan — unlike a credit card — can lead to foreclosure. Only use cash-out refinancing for purposes that genuinely improve your financial position, not to paper over cash flow problems.
Tax Treatment of Cash-Out Refinance Proceeds
Cash received from a cash-out refinance is loan proceeds, not income — it is not taxable. However, the interest you pay on that cash-out portion has specific deductibility rules under the Tax Cuts and Jobs Act (TCJA):
- Home improvement use: Interest is deductible as home acquisition debt (subject to the $750,000 limit for loans after Dec. 15, 2017, if you itemize)
- Debt consolidation, education, vacation, or other use: Interest is generally NOT deductible as it is considered home equity debt used for non-home purposes under current law
- Mixed use: Requires allocation — consult a tax advisor to track properly
Given these rules, home improvements funded by cash-out refinancing have a real tax advantage that other uses do not. Factor this into your decision if you itemize deductions.
Compare Rate-and-Term vs. Cash-Out
Our main calculator shows monthly savings and break-even for any refinance scenario — including cash-out loans with their slightly higher rates.
Open Full Refinance Calculator →Frequently Asked Questions
How long does a cash-out refinance take to close?
Cash-out refinances typically take 30–60 days to close — longer than rate-and-term refinances because a full appraisal is always required. The appraisal alone takes 1–2 weeks to schedule and complete. Having documentation ready (tax returns, pay stubs, bank statements) reduces delays significantly.
Can I do a cash-out refinance on a rental property?
Yes, but rules are stricter. Lenders typically cap investment property cash-out at 70–75% LTV (vs. 80% for primary residences), require higher credit scores (usually 700+), and charge higher rates. Rental income counts toward your qualifying income, but documentation requirements are more extensive.
What happens if my home appraises lower than expected?
A lower-than-expected appraisal reduces the maximum loan amount. If your new LTV based on the appraisal is too high (e.g., above 80%), you either can't proceed with the cash-out, must take less cash, or may need to pay down your existing balance before closing. This is why it's dangerous to spend your "expected" cash before the appraisal confirms the home's value.
Is there a waiting period for cash-out refinancing?
For conventional cash-out refinances, you typically must have owned the home for at least 6 months. For investment properties, lenders commonly require 12 months of ownership. FHA and VA cash-out programs have their own seasoning requirements. Check with your lender early in the process if you recently purchased or refinanced.