Cash-Out Refinance Calculator

What is a cash-out refinance?

A cash-out refinance replaces your current mortgage with a new, larger loan. You use part of the new loan to pay off the old balance and receive some of the difference as cash, after any costs included in the loan.

A cash-out refinance calculator, also called a cash-out refi calculator, estimates the new payment and compares the new loan with keeping your current mortgage. It uses your current balance and rate, time left, cash-out amount, new rate and term, and closing costs.

Why a cash-out refinance matters

The cash can help fund a major expense, pay off other debt or cover home improvements. But you are borrowing against your home, and refinancing changes the loan terms on your existing balance as well as the money you take out.

A lower rate does not automatically mean a lower payment or lower total cost. A new loan may have a longer term, a larger balance or closing costs added to the amount borrowed. Compare both the monthly payment and the total cost before deciding whether the cash is worth the added borrowing.

Consider comparing a refinance with keeping your current mortgage and borrowing separately. That can help you see whether you need to replace the whole mortgage to access the cash. Ask your lender for the full loan terms and costs before committing.

How to use this cash-out refinance calculator

1. Enter your current mortgage balance, interest rate and months left. Use your current loan details rather than the amount you originally borrowed.
2. Enter the cash you want to receive. The calculator adds this amount to the current balance when estimating the new loan.
3. Enter the proposed new rate and term. Use the terms you are considering, not a rate or term you have not confirmed.
4. Enter closing costs. If the calculator offers a choice to include costs in the new loan, select the option that matches your plan. Rolling costs in increases the balance; paying them separately means you need cash to cover them.
5. Review the new payment, monthly difference, break-even result and lifetime comparison. Change one assumption at a time to see how a different rate, term, cash amount or cost changes the estimate.

Cash-out refinance calculator example

How to read your cash-out refinance results

The new payment is the estimated regular payment on the replacement loan. Compare it with your current payment to see the monthly effect. A negative monthly-difference figure in the sample means the new payment is higher by the amount shown.

The cash-out figure is the cash you asked to receive, not a measure of profit. If closing costs are rolled into the loan, they increase what you borrow and may reduce the cash available at closing if other charges apply. Confirm the actual cash-to-you figure with your lender.

How to improve the cash-out refinance trade-off

1. 01

   Borrow only what you need

   Set a clear purpose and estimate the amount needed before applying. A smaller cash-out amount means a smaller new balance, all else being equal.

2. 02

   Ask lenders to explain every cost

   Request an itemized estimate and ask which costs are optional, which are paid upfront and which can be rolled into the loan. Compare offers using the same loan amount and term.

3. 03

   Compare different loan terms

   A shorter term can reduce how long you pay interest, but it may raise the monthly payment. Check whether that payment fits your budget before choosing it.

4. 04

   Negotiate where you can

   Ask whether the lender can reduce or waive a fee, or offer different terms. Recheck the calculator with any revised rate or cost rather than relying on an initial quote.

5. 05

   Compare borrowing options

   Consider whether a home equity loan or line of credit could meet your need without replacing the existing mortgage. Compare the full costs and terms, not just the starting payment.

Common cash-out refinance mistakes

• Focusing only on the payment

  A lower payment can come from stretching repayment over a longer term. Check the total cost and how long you will carry the debt, too.

• Forgetting that costs affect the loan

  When costs are added to the balance, you borrow more than the cash you take out. Confirm whether the estimate treats costs as paid upfront or financed.

• Treating estimated terms as final

  The result depends on the rates, costs and loan terms you enter. Use the lender’s final offer to update your comparison before deciding.

• Assuming cash out is free money

  The cash is borrowed against your home. Plan how you will use it and how the new payment fits alongside your other expenses.

The cash-out refinance formula

Key terms

Cash-out refinance

A new mortgage that pays off an existing mortgage and provides additional borrowed funds to the homeowner.

Current balance

The amount still owed on your existing mortgage.

Closing costs

Fees and other costs associated with completing the new mortgage.

Break-even

The point at which savings from a new loan have offset refinancing costs. If the new payment is higher, there may be no payment-savings break-even.