Cash-Out Refinance Calculator

Most conventional cash-out refinances cap loan-to-value at 80% of appraised home value. On a $500,000 home, that's a maximum new loan of $400,000 - minus your existing balance and closing costs, the rest is cash to you. VA cash-out can go up to 100% LTV; FHA cash-out is capped at 80% LTV (as of 2019).

When you need a large sum, want a fixed long-term rate, and current mortgage rates are at or below your existing rate. It can be cheaper than a HELOC or home equity loan for very large draws. It rarely makes sense purely to lower rate by less than 0.75%, since closing costs (2%–5% of loan) erode the savings.

Cash-out refinance closing costs typically run 2%–5% of the new loan amount, covering origination, appraisal, title insurance, recording, and prepaid escrows. On a $400,000 loan, that's $8,000–$20,000 - often rolled into the loan, which slightly reduces cash to the borrower and increases long-term interest.

Divide total closing costs by monthly payment savings (if applicable) or compare total interest paid vs the prior loan. If you take cash out at a higher rate than your old mortgage, there is no monthly savings - the "break-even" is really about whether the cash use generates more value than the additional interest cost.