Mortgage refinance lenders usually require you to have at least 20% equity — or a maximum 80% loan-to-value (LTV) ratio — to qualify for a cash-out refinance.
Using the example above of a $350,000 home with a $150,000 mortgage balance, you’d have roughly 57% equity before refinancing. After refinancing into a new $250,000 mortgage, you’d have about 29% equity remaining. While you only tapped $100,000, you could’ve accessed up to $130,000 and still retained 20% equity.
A cash-out refinance calculator can give you an estimate of how much equity you can access, based on your home value and LTV ratio. However, it’s best to avoid overborrowing by only tapping the equity you actually need.