A Cash Out Refi Calculator is a smart financial tool designed to help homeowners understand how much cash they can take out from their home equity through refinancing. Whether you’re planning a home renovation, paying off debts, or making a large purchase, this calculator gives you accurate estimates to plan better and borrow smartly.
Cash-Out Refinance Calculator
🔍 What Is a Cash-Out Refinance?
A cash-out refinance replaces your existing mortgage with a new, larger loan. The difference between the new loan amount and your current mortgage balance is the cash you take out — drawn from your home equity.
For example:
- Your home is worth $400,000
- You owe $250,000 on your mortgage
- You refinance to a $320,000 mortgage
- You take out $70,000 in cash (minus fees)
A Cash Out Refi Calculator helps estimate:
- Maximum allowable refinance amount
- Cash-out amount after fees
- New monthly mortgage payment
- Loan-to-value (LTV) ratio
🧮 How to Use the Cash Out Refi Calculator
Using the calculator is simple. You’ll need to input the following details:
- Current Home Value – The market value of your home.
- Current Mortgage Balance – What you still owe on your current mortgage.
- Refinance Rate – The interest rate for the new mortgage.
- Loan Term – Usually 15, 20, or 30 years.
- Desired Cash-Out Amount – How much money you want to withdraw.
- Estimated Closing Costs – Fees associated with refinancing.
Once these inputs are entered, the calculator will generate:
- New loan amount
- New monthly mortgage payment
- Total interest paid over time
- Cash you’ll actually receive after closing costs
- Updated LTV ratio
📊 Cash Out Refinance Formula
To calculate your potential cash-out amount and mortgage terms, here’s the formula:
Maximum Loan Amount = Home Value × Maximum LTV
Available Equity = Maximum Loan Amount – Current Mortgage Balance
New Monthly Payment = New Loan Amount × (Monthly Interest Rate / (1 – (1 + Monthly Interest Rate)^–Number of Payments))
Where:
- LTV = Loan-to-value ratio (typically 80% for cash-out refi)
- Monthly Interest Rate = Annual Rate ÷ 12
- Number of Payments = Loan Term in months
💡 Example Calculation
Let’s walk through an example using the calculator:
Inputs:
- Home Value: $500,000
- Current Mortgage Balance: $300,000
- Refinance Rate: 5.5%
- Loan Term: 30 years
- Desired Cash-Out: $50,000
- Closing Costs: $5,000
Step 1: Max LTV (80%)
$500,000 × 0.80 = $400,000
Step 2: Available Equity
$400,000 – $300,000 = $100,000
Step 3: Cash-Out Eligibility
Requested cash-out ($50,000) + closing costs ($5,000) = $55,000
Total new loan = $355,000
This is within max LTV ($400,000), so it’s allowed.
Step 4: Monthly Payment Estimate
Use the monthly payment formula or calculator interface. It will estimate your new monthly payment, interest, and savings.
🎯 When Should You Use a Cash Out Refi?
- Home renovations (kitchens, bathrooms, etc.)
- Debt consolidation at lower interest rates
- College tuition or large one-time expenses
- Emergency funds or investments
Avoid using cash-out refinancing for luxury items or if you’re near retirement with limited repayment capacity.
⚖️ Pros and Cons of Cash Out Refinance
✅ Pros
- Lower interest rate than personal loans or credit cards
- Larger loan amounts available
- Potential tax-deductible interest (check local laws)
- Extended loan terms reduce monthly payments
❌ Cons
- Extends your mortgage life
- Closing costs apply
- Reduces home equity
- Higher LTV may mean higher risk
📌 Tips for Using the Calculator Effectively
- Be accurate with your home’s value – Use recent appraisals.
- Compare interest rates – A small rate difference impacts long-term cost.
- Don’t max out your equity – Leave a buffer for market dips.
- Add fees in your calculation – Always include closing costs.
- Consult with a lender – The calculator gives estimates, not legal loan offers.
🙋 20 FAQs About Cash Out Refi Calculator
1. What is the maximum I can cash out during refinance?
Typically, 80% of your home’s appraised value minus your current mortgage balance.
2. Can I refinance more than once?
Yes, but fees and your equity should justify it.
3. Is the cash I receive taxable?
No, the cash from refinancing is a loan, not income.
4. Does cash-out refinancing affect credit score?
Yes, there may be a temporary dip due to the credit inquiry and new debt.
5. What is included in closing costs?
Appraisal, title insurance, attorney fees, and origination charges.
6. Can I refinance with bad credit?
Possible, but you may face higher interest rates or be denied.
7. Is an appraisal required for cash-out refi?
Yes, lenders need an up-to-date home valuation.
8. Is it better than a HELOC or home equity loan?
It depends. A cash-out refi offers a single fixed-rate loan, which can be simpler and more predictable.
9. How often can I use this calculator?
As often as needed—it’s designed for unlimited free use.
10. Does this calculator include PMI (Private Mortgage Insurance)?
It typically calculates without PMI unless your LTV exceeds 80%.
11. Can I use the calculator for investment properties?
Yes, but rates and rules may differ.
12. Is refinancing good during rising interest rates?
Only if you’re cashing out equity for essential needs or locking in a better rate than current debts.
13. Can this calculator show total interest paid?
Yes, it helps estimate total interest over the life of the loan.
14. Will refinancing reset my loan term?
Yes, if you choose a new 30-year loan, the term restarts.
15. Can I customize the loan term in the calculator?
Yes, you can choose 15, 20, or 30 years typically.
16. Will I get instant approval from this tool?
No, it provides estimates. Approval comes from lenders.
17. Can I use this tool on mobile devices?
Yes, it’s mobile-friendly and works on all browsers.
18. Is cash-out refinancing risky?
It can be if you borrow excessively or refinance often.
19. Does the calculator adjust for property taxes or insurance?
No, it focuses on principal and interest. Use separate tools for tax/escrow estimates.
20. Do I need a certain credit score for refinancing?
Usually a minimum of 620–640, but varies by lender.
🏁 Final Thoughts
The Cash Out Refi Calculator is a valuable tool for homeowners considering tapping into their home equity. It gives you a clear snapshot of how much cash you can access, what your new payments will look like, and how your financial picture will change post-refinance. Always use it alongside professional financial advice, but let it be your first step toward smarter home financing.