How the calculator works
A cash-out refinance replaces your mortgage with a bigger one and pays you the difference. How much you can take out depends on your home's appraised value and the program's maximum loan-to-value (LTV).
- Maximum new loan = home value × maximum LTV.
- Maximum cash = maximum new loan − current mortgage payoff − any other liens being paid off − closing costs, if you pay them from the loan.
- For VA loans the cap includes the funding fee if it is added to the loan, so the base loan is the cap ÷ (1 + fee rate).
- The new payment is principal and interest on the new loan at the rate and term you enter.
If you enter how much cash you want, the calculator sizes the loan for that amount instead and tells you if it exceeds the limit.
Maximum loan-to-value by program
| Program | Max LTV on cash-out | Source |
|---|---|---|
| Conventional (Fannie Mae), 1-unit primary home | 80% | Fannie Mae Eligibility Matrix |
| Conventional (Fannie Mae), 2–4 unit primary home | 75% | Fannie Mae Eligibility Matrix |
| FHA | 80% | HUD Mortgagee Letter 2019-11 |
| VA | Up to 100% of reasonable value; many lenders cap lower | 38 CFR 36.4306 |
Fannie Mae also generally requires that at least one borrower has been on title for six months and that a first mortgage being paid off is at least 12 months old. Individual lenders can set tighter limits than the program allows.
Worked example
Your home appraises at $600,000 and you owe $280,000 at 4.5% with 25 years left (payment about $1,556). You want a 30-year conventional cash-out refinance at 6.75%, with closing costs of 2.5% of the new loan paid from the proceeds.
- Maximum loan: $600,000 × 80% = $480,000.
- Closing costs: $480,000 × 2.5% = $12,000.
- Maximum cash: $480,000 − $280,000 − $12,000 = $188,000.
- New payment: about $3,113 a month, up about $1,557.
- Interest: about $640,800 over 30 years, compared with about $186,900 left on your current loan.
That last line is the hidden cost. You are borrowing $188,000, but you are also repricing your existing $280,000 from 4.5% to 6.75% and stretching it to 30 years.
VA cash-out and the funding fee
The VA funding fee on a cash-out refinance is 2.15% of the loan for first use and 3.3% after first use. Veterans receiving VA compensation for a service-connected disability, and some others, are exempt. VA rules let the funding fee be added to the loan only up to 100% of the home's reasonable value. Example: a $600,000 home with a lender cap of 90% allows a $540,000 total loan, which is a $528,634 base loan plus an $11,366 first-use fee.
Edge cases
- FHA mortgage insurance. FHA loans charge an upfront and an annual premium, which this tool does not add. Use the FHA loan calculator for the full payment.
- Risk. Using home equity to pay off credit cards or other debts turns that debt into a loan secured by your home, so falling behind puts the home at risk.
- Appraisal. All limits apply to the appraised value, not your estimate. A low appraisal shrinks the cash.
- Taxes and insurance usually stay the same when you refinance, so the payment change shown is principal and interest only.
What to do next
See your equity with the home equity calculator, read HELOC vs home equity loan vs cash-out refinance, and if you only want a lower rate, use the refinance break-even calculator.