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Cash Out Refinance Calculator

Calculate how much tax-free home equity you can pull out at an 80% conventional Loan-to-Value (LTV) cap (or 100% VA LTV), compare your new monthly mortgage payment against keeping your existing low-rate mortgage plus a second-lien HELOC, and see the true marginal interest rate you are paying on the cash extracted.

Updated November 7, 2026. Free, no sign-up; everything runs in your browser and nothing you type is stored.

Cash-Out Refinance vs. Keep First Mortgage + HELOC Calculator

Current home appraised value ($) Current mortgage balance ($) Current mortgage interest rate (%) Current monthly P&I payment ($)

Cash-out amount desired ($) New 30-year cash-out refi rate (%) Refi closing costs rolled in ($) Alternative 2nd-lien HELOC rate (%, 15-yr)

Maximum available cash out at 80% LTV

–

–New cash-out refi monthly P&I

–Old mortgage + 15-yr HELOC total/mo

–True marginal APR on the new cash

–Cheaper monthly financing option

2026 Fannie Mae, Freddie Mac, FHA & VA Cash-Out LTV Limits

Loan program	Max Cash-Out LTV (1-Unit Primary)	Seasoning requirement
Conventional (Fannie Mae / Freddie Mac)	80% LTV	12 months on existing mortgage (6 months ownership)
FHA Cash-Out Refinance	80% LTV	12 months occupancy + 12 on-time monthly payments
VA Cash-Out Refinance (Type I / II)	Up to 90%–100% LTV (lender overlay dependent)	210 days from first payment + 6 monthly payments
Investment property (1-unit conventional)	75% LTV	12 months seasoning + higher LLPA rate adjustment

The Hidden Trap of Cash-Out Refinancing a Low-Rate First Mortgage

When your existing first mortgage has a low interest rate (such as 3.5%–5.0%) and today's 30-year cash-out refinance rate is 6.5%+, replacing your entire $260,000 balance just to pull out $80,000 means you are paying an extra 2%+ every year on the old $260,000 balance too. That pushes the true marginal interest rate on the $80,000 of new cash above 11%–13%—making a second-lien HELOC or Home Equity Loan at 8.25% far cheaper even though the HELOC's headline rate looks higher than 6.625%.

Cash-Out Refinance vs. HELOC Worked Example (Blended Rate Comparison)

On a $500,000 home with a $260,000 balance at 4.25% ($1,580/month), the 80% LTV cap ($400,000) allows up to $140,000 in gross cash out. Pulling $80,000 plus $4,500 in closing costs creates a $344,500 loan at 6.625% = $2,205.87/month. Because you gave up 4.25% on your old $260,000 balance, the true marginal interest cost on your $80,000 cash is 12.14%/year—whereas keeping your old $1,580 mortgage and taking an $80,000 15-year second-lien loan at 8.25% ($776/month) saves over $3,100 a year in Year-1 interest.

Common questions

How much cash can I get from a cash-out refinance?

On a primary residence, conventional and FHA guidelines cap your new loan at 80% of your home's current appraised value. Multiply your home value by 0.80 and subtract your existing mortgage payoff balance and closing costs to find your net cash at closing.

Is cash from a cash-out refinance taxable?

No. Because cash-out refinance proceeds are a loan you must repay rather than income, the IRS does not tax the money you receive. Moreover, under IRC § 163(h), the interest on the cash-out portion is tax-deductible on Schedule A only if the funds are used to buy, build, or substantially improve the home securing the loan.

When is a HELOC better than a cash-out refinance?

Whenever your existing first mortgage rate is more than 0.75% below current cash-out refinance rates, keeping your first mortgage untouched and borrowing only the new cash via a second-lien HELOC or fixed home equity loan almost always results in lower total interest.

Sources

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General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.