How much of your equity you can take out depends on one number above all: the loan-to-value limit for your loan type.
How it works
Cash available = value × loan-to-value limit − current balance − closing costs
The new loan can be at most the value times the limit. It pays off what you owe and the closing costs; the rest comes to you. Add a rate to see the principal and interest payment on the new, larger loan.
Keep in mind
- Conventional and FHA cash-out refinances on a primary home generally cap at 80% of value; VA can go higher; investment properties and non-QM programs often cap lower.
- Lenders use an appraised value, which can differ from an online estimate.
Questions
How much cash can I get from a cash-out refinance?
At an 80% limit on a $600,000 home with $300,000 owed, the new loan could be up to $480,000. After paying off $300,000 and costs, you would receive somewhat less than $180,000. See also: Cash-out refinance.
Is a HELOC better than a cash-out refinance?
If your current rate is lower than today’s rates, keeping it and adding a HELOC or second mortgage often costs less. Compare with the blended rate calculator.
Related guides
- Cash-out refinance
- Second mortgages & HELOCs
- Refinancing
- HELOC vs cash-out refinance
- Home equity loan vs HELOC
