Cash-Out Refinance Calculator
Maximum cash at the lender's LTV cap, the new payment, extra lifetime interest and the effective APR on the cash — compared with keeping your mortgage and taking a HELOC or home equity loan instead.
| Maximum cash available | — |
|---|---|
| New loan amount | — |
| Current payment → new payment | — |
| Interest left on the current loan | — |
| Total interest on the new loan | — |
| Extra interest caused by the refinance | — |
| Effective cost of the cash (APR) | — |
| Alternative: keep the mortgage + HELOC / equity loan | — |
| Verdict | — |
In short
A cash-out refinance replaces the whole mortgage with a larger one, so the new rate applies to the old balance too. Taking 60,000 from a 280,000 loan at 5% by refinancing 347,000 at 6.5% adds about 260,000 of lifetime interest — an effective 8% APR on the cash — while a HELOC at 8.5% for the same cash costs about 46,000 and leaves the 5% mortgage untouched.
Who this is for: Homeowners weighing a cash-out refinance against a HELOC or home equity loan.
Cash-out refinance vs HELOC vs home equity loan
| Cash-out refinance | HELOC | Home equity loan | |
|---|---|---|---|
| What changes | Whole mortgage replaced at today's rate | Second line, variable rate | Second loan, fixed rate |
| Best when | New rate ≤ current rate | Spending in stages | One lump sum, fixed payment |
| Closing costs | Highest (2–5% of the whole loan) | Low | Low–moderate |
| Risk | Term reset, re-pricing the old balance | Rate rises, payment jump after draw period | Second payment on top of the mortgage |
The trap: a cash-out refinance can show a lower monthly payment than today because the term restarts at 30 years, while total interest rises by tens of thousands. The extra-interest and effective-APR lines are the honest measures.
Assumptions
- Maximum cash = value × LTV cap − balance − closing costs; new loan = balance + cash + costs.
- Effective APR on the cash = IRR of the payment increase over the new term against the cash received (reported as extra interest when the term reset lowers the payment).
- Alternative = current payment unchanged plus an amortising equity loan on the cash.
Worked example
New loan 347,000 at 69.4% LTV. Payment 1,751 → 2,193. Interest left on the old loan 182,200; on the new loan 442,600 — 260,000 more for 60,000 of cash, an effective APR of about 8.05% on the cash once the re-priced balance is counted. The HELOC route costs 591 a month for 15 years (46,400 interest) and leaves the 5% mortgage alone — cheaper by roughly 214,000 over the life of the loans.
Frequently asked questions
How much cash can I take out?
Usually up to 80% of the home's value minus the current balance and closing costs; some programmes allow 85–90%.
Is a cash-out refinance a good idea?
When the new rate is no higher than your current one and you need a large sum, yes. If you locked in a low rate, a HELOC or home equity loan is almost always cheaper.
Does the cash count as income?
No — it is a loan, not income, so it is not taxed; interest deductibility (US) depends on using the funds for the home.
What are typical closing costs?
2–5% of the new loan amount — appraisal, title, origination and recording fees — which this calculator adds to the loan.
What is the maximum LTV for a cash-out refinance?
80% for most US conventional loans, up to 90% on some government programmes; UK and UAE lenders set their own caps, often lower.
Cash-out refinance or HELOC?
If your current rate is below today's rates, a HELOC or home equity loan is almost always cheaper; a cash-out refinance only makes sense when the new rate is no higher than the old one.
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