How to use the cash-out refinance calculator
- Enter the home: its value and what you still owe.
- Enter your current loan: rate and years left, so the old payment can be compared.
- Set the new loan: rate, term, the lender's maximum LTV and closing costs.
- Choose the cash: type an amount, or leave it blank to see the maximum.
- Read the result: cash to you, new payment and interest on both loans.
What a cash-out refinance does
A cash-out refinance replaces your mortgage with a larger one and pays you the difference. The new loan must pay off the old balance and the closing costs first, and what is left is your cash. The most the lender will lend is the home value times its maximum loan-to-value, so the cash you can take is the value times LTV, minus your balance, minus closing costs. This cash out refinance calculator does that arithmetic in either direction: leave the cash box blank for the maximum, or type the amount you need and it sizes the loan.
Everything is principal and interest. Property tax, insurance and any mortgage insurance come on top, and they depend on your lender and loan type.
Worked example with the defaults
A $400,000 home with a $220,000 balance at 3.25% and 25 years left. The new loan is 80% of value, $320,000.00. Closing costs at 3% are $9,600.00, paid from the proceeds, and $90,400.00 reaches you. The new payment at 6.5% over 30 years is $2,022.62, against $1,072.10 on the old loan, a change of +$950.52 a month. Interest on the new loan if held 30 years is $408,142.36.
The important line is the rate. In this example you give up a 3.25% mortgage for 6.5% on the whole balance, not just on the cash. That is why the payment more than doubles for a $90,000 withdrawal.
When it costs more than it looks
Take cash out only if the new rate is close to your old one, or the old one is already high. If your current rate is far below today's, compare a home equity loan or HELOC, which borrow against equity and leave your first mortgage alone, using the home equity loan calculator. If your goal is a lower rate with no cash, the mortgage refinance calculator finds the break-even.
Resetting to a 30-year term also restarts the clock. Choose a new term equal to the years you have left to compare fairly.
Limits and what lenders add
Lenders set their own maximum LTV, credit and income rules, and some loan types allow more or less than the 80% default. Closing costs are commonly quoted as roughly 2% to 6% of the loan, but only a Loan Estimate gives your real figure. Cash-out loans can also carry a higher rate than a plain rate-and-term refinance. None of this is modelled here; the result is a planning estimate, not a quote or advice.
Method and sources
New loan = home value x maximum LTV (or, for a chosen cash amount, (cash + balance) / (1 - closing cost share)). Cash = loan - balance - closing costs. Payments use the standard amortization formula. No outside rate or fee data is used: every rate and cost is your input.
Worked examples
| Example | Input | Result |
|---|---|---|
| Max cash at 80% LTV | Home value ($): 400000; Current mortgage balance ($): 220000; Current interest rate (%): 3.25; Years left on current loan: 25; New interest rate (%): 6.5; New loan term (years): 30; Maximum loan-to-value (%): 80; Closing costs (% of new loan): 3 | New loan amount: $320,000.00; Closing costs: $9,600.00; Cash to you: $90,400.00; New loan-to-value: 80.0%; Current payment: $1,072.10; New payment: $2,022.62; Monthly payment change: +$950.52; Interest on the new loan: $408,142.36; Interest left on the old loan: $101,628.71 |
| $40,000 for a renovation | Home value ($): 500000; Current mortgage balance ($): 300000; Current interest rate (%): 5.5; Years left on current loan: 27; New interest rate (%): 6.25; New loan term (years): 30; Maximum loan-to-value (%): 80; Closing costs (% of new loan): 2.5; Cash you want ($, blank = the maximum): 40000 | New loan amount: $348,717.95; Closing costs: $8,717.95; Cash to you: $40,000.00; New loan-to-value: 69.7%; Current payment: $1,779.41; New payment: $2,147.12; Monthly payment change: +$367.71; Interest on the new loan: $424,243.95; Interest left on the old loan: $276,528.95 |
| Rate drops and cash out | Home value ($): 350000; Current mortgage balance ($): 150000; Current interest rate (%): 7.5; Years left on current loan: 20; New interest rate (%): 6; New loan term (years): 20; Maximum loan-to-value (%): 80; Closing costs (% of new loan): 3; Cash you want ($, blank = the maximum): 25000 | New loan amount: $180,412.37; Closing costs: $5,412.37; Cash to you: $25,000.00; New loan-to-value: 51.5%; Current payment: $1,208.39; New payment: $1,292.53; Monthly payment change: +$84.14; Interest on the new loan: $129,794.89; Interest left on the old loan: $140,013.55 |
FAQ
How much cash can I take out of my home?
Home value times the lender's maximum LTV, minus your mortgage balance and closing costs. At 80% on a $400,000 home with a $220,000 balance that is about $90,000 after 3% closing costs.
Are closing costs paid from the cash?
In this calculator, yes. They are taken out of the new loan's proceeds, so the cash you receive is lower than the difference between the new loan and your old balance.
Why is my payment so much higher after a cash-out refinance?
Two reasons: the balance is larger, and the new rate applies to all of it. If your old rate was much lower, the second effect is often bigger than the first.
Is a cash-out refinance better than a HELOC?
It depends on your rate. If your current mortgage rate is lower than today's, a HELOC or home equity loan keeps it. If your rate is about the same or higher, one cash-out loan can be simpler and cheaper.
Does this include mortgage insurance?
No. Conventional loans above 80% LTV usually need it. Add it to the payment yourself if it applies.
Can I use this for a VA cash-out refinance?
Roughly, but VA loans have a funding fee and their own LTV rules. See the VA loan calculator for the funding fee on purchases.