Financing
Cash-Out Refinance Calculator
See how much equity you can pull from your property and what your new payment will be.
Refinance summary
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How rental property returns work
A cash-out refinance replaces your existing mortgage with a new, larger loan and gives you the difference in cash. Lenders cap the new loan at a percentage of your home's current value — the loan-to-value ratio (LTV) — so the more equity you have, the more you can pull out. The calculator multiplies your home value by the LTV percentage to find the maximum new loan, subtracts your current mortgage balance to get the gross cash available, and then subtracts closing costs to show your net cash out. The new monthly payment is calculated with the standard amortization formula: the loan amount times the monthly interest rate divided by one minus one-plus-the-rate raised to the negative number of payments. If the interest rate is zero, the payment is simply the loan amount divided by the number of months. Remember that a cash-out refinance restarts your loan term, so even if the rate is lower your payment can rise because you are borrowing more. A key thing to watch is whether there is enough equity. If your current balance exceeds the new loan amount, the result is negative — meaning you owe more than the lender will finance and there is no cash to pull out. The calculator will show that negative figure with a note rather than hiding it, so you can see exactly where you stand. Closing costs on a refinance typically run 2–5% of the new loan amount, and many borrowers roll those costs into the loan rather than paying them out of pocket.
Worked example
Suppose your home is worth $400,000, you still owe $220,000 on your current mortgage, and your lender allows a maximum LTV of 75%. You are considering a new 30-year loan at 6.5% interest with $8,000 in closing costs.
The new loan amount is $400,000 × 75% = $300,000. Gross cash out is $300,000 − $220,000 = $80,000. After $8,000 in closing costs, your net cash out is $72,000.
Using the amortization formula with a monthly rate of 0.065 / 12 = 0.005417 and 360 payments, the new monthly principal-and-interest payment is about $1,896. You walk away with $72,000 in cash, but your mortgage payment rises from whatever you were paying to $1,896 per month and the term resets to 30 years.
Frequently asked questions
What is a cash-out refinance?
A cash-out refinance replaces your current mortgage with a new, larger loan based on your home's current value. You receive the difference between the new loan and your old balance in cash, which you can use for renovations, debt payoff, or investing in another property.
How much equity can I take out?
It depends on your lender's maximum loan-to-value (LTV) ratio. Many lenders cap cash-out refinances at 75–80% LTV for investment properties and 80% for primary residences. The calculator multiplies your home value by the LTV percentage to find the maximum new loan, then subtracts your current balance.
Are closing costs paid out of pocket or rolled into the loan?
Either option is usually possible. If you roll closing costs into the new loan, your loan amount increases and your cash out decreases by the same amount. The calculator subtracts closing costs from gross cash out to show your net cash, so enter the amount you expect to pay or finance.
Why did my cash out come out negative?
A negative result means your current mortgage balance is higher than the maximum new loan the lender will allow. In other words, you do not have enough equity to pull cash out at the LTV you entered. You can try a higher LTV if your lender allows it, or wait until your home value rises or your balance drops.
Does a cash-out refinance reset my loan term?
Yes. The new loan replaces your old one entirely, so the term starts over. Even if the new interest rate is lower, your monthly payment can be higher than before because you are borrowing more money and spreading it over a new term. Use the calculator to compare the new payment to your current one before deciding.