Cash-Out Refinance Calculator
Estimate your cash-out and monthly payment amounts
A cash-out refinance is one way to borrow cash at cheaper rates than you’ll find on credit cards or unsecured personal loans. It allows you to replace your current mortgage with a new one that covers both the cash you borrow against your home equity and the home itself.
Our cash-out refinance calculator helps you estimate the monthly payments on your new mortgage; here’s how:
- Start by inputting your home’s current value and your outstanding mortgage balance. You’ll also need to share your credit score range, your estimated cash-out amount, your loan term and your estimated mortgage interest rate. You can check current refinance rates on LendingTree.
- Click the “Advanced Options” button and add information about your current property taxes, homeowners insurance premium and homeowners association (HOA) fees (if applicable). This is optional, but will help give you a more accurate payment estimate.
- Once you’ve calculated your payment amount, take some time to compare cash-out refinance offers from multiple lenders.
How much cash can I get?
The average cash-out refinance borrower had $213,000 worth of tappable home equity as of the second quarter of 2025, according to ICE Mortgage Technology.
To calculate the cash-out refinance amount you can get, use the calculator above or follow these manual steps:
- Find out the maximum loan-to-value (LTV) ratio for your chosen cash-out refinance program.
- Multiply the maximum LTV ratio percentage by your home’s estimated value.
- Subtract your loan balance from that figure to get your estimated cash-out amount.
Let’s say your house is worth $450,000 and you owe $300,000 on your existing mortgage, which means you have $150,000 in available equity. Keeping the maximum 80% LTV ratio requirement in mind, you may borrow up to an additional $60,000 with a cash-out refinance.
To calculate this, multiply your home’s value by 80% ($450,000 x 0.80 = $360,000) and subtract your outstanding loan balance from that amount ($360,000 – $300,000 = $60,000).
How much equity do you need for a cash-out refinance?
Ultimately, your LTV ratio limits how much cash you can get. If you have more equity, you can borrow more cash. If you have very little equity, you may not qualify to borrow much or any cash against it. Both conventional loans and FHA loans allow you to borrow up to a maximum 80% LTV ratio. VA loans go a little higher, allowing up to a 90% LTV for cash-out refinances.
| Loan type | Required equity amount | Maximum LTV ratio |
|---|---|---|
| Conventional cash-out refinance | 20% | 80% |
| FHA cash-out refinance | 20% | 80% |
| VA cash-out refinance | 10% | 90% |
If I refinance, what will my new monthly payment be?
The calculator at the top of this page will show you how much your new monthly payment would be, based on your home’s value, your current mortgage balance and the desired cash-out amount.
How can a cash-out refinance lower my monthly mortgage payment?
If current rates have dropped enough that your new, lower rate offsets borrowing more than you currently owe, a cash-out refinance can lower your monthly mortgage payment.
For example, let’s say you purchased a home with a $350,000 mortgage at a 7% fixed interest rate and a $2,329 monthly payment. That was several years ago, and now your current loan balance is only $200,000.
If mortgage interest rates have dropped to 6% and you want to borrow an extra $25,000 ($225,000 total) to make some home improvements, your new monthly payment would only be $1,349. Despite tapping an extra $25,000 of equity, the lower rate and loan amount compared to your existing mortgage saves you $980 per month.
| Original home loan | Cash-out refinance loan |
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Is a cash-out refinance worth the costs?
Here are the three key factors to consider when deciding whether a cash-out refinance is worth it:
1. Closing costs
You’ll typically spend between 2% and 6% of your loan amount on refinance closing costs with a cash-out refinance.
The fees on a cash-out refinance are similar to what you’ll find on a purchase loan and include:
- Application fees
- Appraisal fees
- Flood certification costs
- Origination fees
- Title search fees
- Title insurance premiums
Closing costs can be paid out of pocket or subtracted from your cash-out funds. Your lender may also offer a no-closing-cost refinance option. However, this choice isn’t free — your lender will either raise your interest rate or increase your loan amount to pay the costs on your behalf, which means a higher monthly payment and more interest charges over the loan’s lifetime.
2. Break-even point
The critical question is: how long will it take for your monthly savings to offset what you paid upfront? The number of months post-closing it takes to reach that point is known as your break-even point.
Total loan costs ÷ Monthly savings = # of months to reach your break-even point
You can use this break-even formula as long as your monthly payment will decrease once you refi, which means that you’re saving money each month. Divide your total costs by that monthly savings to find out how many months it takes to “break even.”
If your payment will increase after the refi, there’s no break-even point in terms of monthly payment savings. In cases like this, it’s likely only worth it to refinance in a true emergency, like to avoid foreclosure or consolidate high-interest debt.
Break-even calculation example
Your situation:
| Home value | $350,000 |
| Current mortgage balance | $180,000 at 7% (monthly payment: $1,863) |
| New loan (with cash out) | $200,000 at 6.6% (monthly payment: $1,277) |
| Cash-out amount | $20,000 |
| Closing costs | $6,000 |
Your monthly savings: $1,863 – $1,277 = $586
Break-even calculation: $6,000 ÷ $586 = 10.24 months
You’ll recover your closing costs in just over 10 months. After that, you’re saving $586 every single month.
The verdict: It’s worth it to refinance and take out cash in this case. You’ll break even in less than a year and save more than $7,000 annually going forward.
3. Total interest
Even when a refi lowers your monthly payment and interest rate, you could end up paying significantly more in total interest over the life of the loan. That’s because you’re resetting the clock on your mortgage when you take out the new loan, potentially extending the number of years you’ll pay interest. Those extra years of interest payments can add up to tens of thousands of dollars.
How resetting your loan term costs you
Let’s say you bought your home 16 years ago with a 30-year mortgage. You’ve been making payments faithfully, and now have 14 years remaining. If you refinance into a new 30-year loan, you’re extending your debt by 16 years.
| Original loan (16 years ago): | After 16 years of payments. | New cash-out refinance: |
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Your monthly payment will drop by $410 even though you borrowed $50,000 more. That probably feels like a win.
But you’ll pay $249,667 more in total interest than if you’d kept your original loan.
Yes, you got $50,000 cash. Yes, your interest rate and monthly payments dropped. But you’re paying 175% more in interest because you restarted the 30-year clock.
It may feel counter-intuitive, but if you refinance into a loan with a higher payment you could end up paying dramatically less interest overall. For example, if you refinance from a 30-year mortgage to a 20-year or 15-year mortgage.
You can also choose to match your remaining term. If you have 22 years left on your current mortgage, refinance to a new 20-year loan instead of a 30-year loan. This keeps you on roughly the same timeline while still allowing you to cash out equity. (Some lenders, like Rocket Mortgage, allow you to choose a custom loan term so you can match it exactly.)
Is it still worth it to refinance and take cash out?
It’s OK to take on paying some additional interest for the privilege of accessing a large sum of cash now. More than half (70%) of cash-out refinance borrowers accepted a higher rate in exchange for access to cash ($94,000 on average) in Q2 2025. Just don’t be fooled into thinking that any cash-out refinance loan that gets you a lower monthly payment or lower interest rate is going to save you money overall.
If you’re not sure if it’s worth it, take the time to calculate both the cost of the cash you’re taking out (the interest you’ll pay on that cash) and the cost of resetting the clock (total additional interest).
Then, put it in plain language. In our example, that $50,000 cash is really costing you nearly $250,000 in interest. Is what you’re using the money for worth that cost?
What are good reasons to refinance with cash out?
Debt consolidation
If you have high-interest debts like credit cards, personal loans or student loans, you can use a cash-out refinance to pay them off. This can simplify your finances by putting all your debts into one payment and saving you money on interest.
Home improvements and repairs
Home improvements can increase your property’s value and, in many cases, are necessary to maintain its condition. Whether you’re updating the kitchen or fixing the roof, a cash-out refinance can provide the substantial funds needed for these projects.
Education expenses
Advancing your education or funding a relative’s college expenses can be an excellent investment in the future. A cash-out refinance can offer the funds needed for tuition, books and other education-related costs.
Starting a business
You can use the funds from a cash-out refinance to make a down payment on a second home or rental property, potentially increasing your assets and income through real estate investments.
Real estate purchases
You can use the funds from a cash-out refinance to make a down payment on a second home or rental property, potentially increasing your assets and income through real estate investments.
A cash-out refinance is secured by your home. If you can’t make on-time payments, you’re at risk of losing the home to foreclosure.
When is it a bad idea to get a cash-out refinance?
A cash-out refinance may be a risky or unwise choice if:
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The interest rate on your refinance loan is higher than your current mortgage rate.
If your interest rate goes up, you’re volunteering to pay more than you have to in borrowing costs for every dollar of your original mortgage’s remaining balance. -
You’re using the cash payout to consolidate short-term debt.
If you’re using the cash from a refinance to pay off short-term debts — like credit card debt — keep in mind that you’re going to pay interest on that money for a far longer time period. Don’t assume that a low interest rate is better than a higher one, because added time means added interest costs. Crunch the numbers to ensure you’ll benefit financially from consolidating. -
You want to use the money to buy luxuries or big-ticket items that depreciate quickly.
It’s natural for cars, furniture or other fun potential purchases to catch your eye. But if you can’t afford to buy them with cash, you should consider whether you can afford them at all. It’s not wise to borrow money for items that will only detract from your financial health. -
You don’t feel 100% confident that you can make the payments.
If you have any doubt that you can keep up with your payments, you shouldn’t take out any loan that uses your home as collateral. It’s not worth it to lose your house, damage your credit or go through the stresses of foreclosure.
Current refinance rates by loan type
Loan product | Interest rate
Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners over the past seven days for each combination of loan type, loan program, and loan term. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.
| APR
Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners over the past seven days for each combination of loan type, loan program, and loan term. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.
|
|---|---|---|
| 30-year fixed rate refinance | 6.51% | 6.69% |
| 15-year fixed rate refinance | 5.99% | 6.36% |
| 10-year fixed rate refinance | 6.81% | 7.35% |
| FHA 30-year fixed rate refinance | 6.54% | 7.23% |
| 30-year 5/1 ARM refinance | 6.05% | 6.56% |
| VA 30-year fixed rate refinance | 5.71% | 6.02% |
| VA 15-year fixed rate refinance | 5.75% | 6.46% |
What today’s market means for you: Is now a good time to cash out home equity?
Here’s what you need to know about today’s market and whether now is the right time to refinance.
Current mortgage rate trends
As of October 2025, the average 30-year fixed mortgage rate for refinances has come down quite a bit from highs earlier in the year. Rates are expected to remain relatively stable through the end of 2025, with only modest decreases predicted for 2026.
Takeaway: It’s a decent time to cash out your home equity. Rates are low enough for many consumers to feel ready to refinance, and currently the majority of those who refinance are taking cash out.
Home value trends
If you bought or refinanced during the pandemic, you likely have substantial equity from market appreciation alone, even with just a few years of payments under your belt.
Looking ahead, experts forecast home price appreciation will average around 3% to 4% for 2025 and 2026. That’s slower than recent years but still represents steady growth.
What this means for you: This moderate pace means your equity isn’t evaporating, but you’re also not racing against rapidly rising prices.
Making the decision: Is now a good time for me to tap my equity?
It’s probably good timing if:
- Mortgage rates have recently dropped and you want to lock in your rate before they rise
- You can lower your rate while taking cash out
- You bought or refinanced at least three years ago (it’s likely your home’s value has appreciated significantly)
- You’re consolidating high-interest debt
- You need funds for home improvements that will increase your home’s value
Consider waiting or choosing alternatives if:
- Your current rate is below 6%
- You’re nearing the final 10 years of repayment on your primary mortgage and rates haven’t dropped significantly
- You need the flexibility to draw on your funds continually, as needed
- You’re not planning to stay in the home for more than three years
- Improve your credit score. Boosting your credit score is one of the most powerful ways to access lower rates. Reduce your credit card balances, refrain from opening new credit lines and make on-time payments across all accounts. If you need help strategizing, check out LendingTree Spring for more tips.
- Shop around and negotiate. Comparing offers from multiple lenders can save you thousands over the life of your loan, according to LendingTree data. Don’t hesitate to negotiate the terms or walk away if the offer doesn’t work for you.
- Compare both APRs and interest rates: If a low cash-out refinance rate catches your eye, take a beat and consider the overall cost of the loan. Lenders are required to disclose the annual percentage rate (APR), which encompasses all costs associated with the loan, not just the interest charges.
- Consider paying for points.Mortgage points can reduce your interest rate and lead to long-term savings on your cash-out refinance. Usually each point costs 1% of your loan amount and can decrease your rate by up to 0.25 percentage points.
Frequently asked questions
A cash-out refinance involves refinancing your existing mortgage into a new loan that is larger than your current outstanding loan balance. This allows you to take the difference between your old loan and new loan in cash. You can use that cash for any purpose, such as debt consolidation, home renovations or an investment property purchase.
Although the basic guidelines for a cash-out refinance are the same as a rate-and-term refinance, there are some important differences.
- You must qualify for the higher loan amount. Even if you’re able to get a lower interest rate, your payment will almost always be higher because you’re taking on a higher loan amount.
- Your home must be in good condition. Because you’re converting home equity into debt, lenders typically require a home appraisal. If there are items that need to be fixed, the lender may require you to use some of the cash from the refinance to repair them.
- You may need extra title and homeowners insurance. Lenders require you carry enough homeowners insurance and title insurance to protect them. A higher loan amount, or an increase in the cost to replace your home since you bought it, could increase the costs you pay for these types of insurance.
To qualify for a cash-out refinance, you must meet the following general requirements:
- Have at least a 580 credit score for FHA loans or 620 for conventional loans. There’s no minimum credit score for VA loans, though many lenders set their requirement at 620. However, the higher your score for any of these loan types, the better your chances of approval.
- Have a maximum 50% debt-to-income (DTI) ratio, though some lenders may set their DTI maximum lower. Your DTI ratio is the percentage of your gross monthly income used to make monthly debt payments.
- Have a new home appraisal completed to verify your property’s value and confirm your available equity.
- Have asset, employment and income documentation, such as bank statements, pay stubs and tax returns.
You’ll need to shop around to find the best refinance lender for you. Be sure to not only check with your existing lender, but gather refinance quotes from at least two other lenders. To get a feel for what’s out there, you can explore online lender reviews or ask for referrals from family and friends.
Pay attention to both the interest rates and APRs of any loans you’re offered. Additionally, think about how long you plan to stay in your home. If you’re moving soon after your refinance, it might not make sense to go through the process of replacing your existing mortgage.
Enter your best offers into our cash-out refinance calculator at the top of this page to compare offers and pick your best deal.