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Calculator results are estimates for planning, not a loan approval, commitment, rate lock, or Loan Estimate.
What the cash-out refinance calculator calculates
A cash-out refinance replaces your current mortgage with a new, larger one, and you receive the difference in cash at closing. This calculator estimates how much cash you could access, based on your home's value, your current mortgage balance, and a maximum loan-to-value (LTV) limit that lenders typically enforce.
It also estimates your new monthly payment on the larger loan amount, using the new interest rate and term you enter, so you can weigh the cash you'd receive against the higher payment that comes with it.
Unlike a HELOC, a cash-out refinance replaces your entire first mortgage — including its current rate — with one new loan, which matters most if your current rate is already low.
How to use it, step by step
- 1Enter your estimated current home value — a recent appraisal, a comparable-sales estimate, or the automated estimate from the 4Homes home value tool all work as a starting point.
- 2Enter your current mortgage balance — what you actually owe today, not your original loan amount.
- 3Review the maximum LTV the calculator applies (commonly around 80% for conventional cash-out refinances) and the estimated cash available within that limit.
- 4Enter a new interest rate and loan term to test, and review the resulting new monthly payment on the larger loan.
- 5Compare the cash available against your reason for pulling it — renovation, debt consolidation, or another goal — and weigh it against the new, higher payment.
A worked example
Example inputs
- Estimated home value
- $500,000
- Current mortgage balance
- $250,000
- Maximum LTV
- 80%
- New interest rate (example only)
- 7%
Result
At 80% of a $500,000 home value, the maximum new loan amount is $400,000. Subtracting the $250,000 current balance leaves roughly $150,000 in estimated available cash, before closing costs.
The new loan amount of $400,000 at the illustrative 7% rate on a 30-year term produces a materially higher monthly payment than the original $250,000 loan — the tradeoff that makes weighing the new rate against the current one essential before moving forward.
The 7% rate above is an illustrative example input only, not a current quote.
How to read the result
The estimated cash available is a ceiling, not a guarantee — the actual amount depends on an appraisal, your credit profile, and the lender's specific program guidelines, and closing costs reduce net proceeds.
Compare the new interest rate against your current rate carefully. If your current rate is well below market, a cash-out refinance means giving that rate up on your entire balance, not just the new cash portion.
The new LTV shown after cash-out matters for future decisions too — a higher LTV can mean PMI if you go over certain thresholds, and less cushion if home values soften.
Common mistakes
- Focusing only on the cash received and not on the new monthly payment, which applies to your entire loan balance, not just the cash-out portion.
- Refinancing out of a low rate into a meaningfully higher one without running the full cost comparison against alternatives like a HELOC or home equity loan.
- Using an optimistic home-value estimate instead of a conservative one, which can overstate the cash actually available once an appraisal comes in.
- Not accounting for closing costs, which reduce the net cash you actually receive from the estimated gross amount.
Related guides
- HELOC Payment Calculator
- HELOC vs. Cash-Out Refinance
- Refinance Break-Even Calculator
- Glossary: Cash-Out Refinance
Frequently asked questions
It depends on your home's value, your current mortgage balance, and the maximum loan-to-value your lender allows — commonly around 80% for conventional loans. The difference between that maximum new loan amount and your current balance is roughly what's available, before closing costs.
Yes — a cash-out refinance replaces your entire current mortgage with a new one at a new rate. If your current rate is lower than today's rates, that lower rate applies to your whole balance, not just the new cash, which is an important tradeoff to weigh.
It depends on your current rate and goals. A HELOC leaves your first mortgage and its rate untouched; a cash-out refinance replaces it entirely. If your current rate is low, a HELOC often makes more sense. See the HELOC vs. cash-out refinance comparison for a fuller breakdown.
Cash-out refinance proceeds are generally treated as loan proceeds, not taxable income, since you're borrowing against your equity rather than realizing a gain. Consult a tax professional regarding your specific situation.
Common uses include home renovations, debt consolidation, education costs, or building reserves. Lenders generally don't restrict the use of funds on a standard cash-out refinance, though your own financial goals should guide the decision.