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Cash-Out Refinance Calculator

See how much cash you could take from your home, your new payment, and what that cash costs compared with keeping your current mortgage.

Level: Grades 11–12

  • Common Core standard HSA.SSE.B.4Derive the formula for the sum of a finite geometric series (when the common ratio is not 1), and use the formula to solve problems.
Printable worksheet

Cash-Out Refinance Calculator

Know the answer you need? Pick an input to work backward.

Inputs

The most you can borrow as a share of the home's value. FHA's cash-out limit is 80%.

How closing costs are paid

The rate on a home equity loan for the same cash, leaving your current mortgage alone.

Result

Cash available

$102,000.00

You could take out up to $102,000.00. Taking $60,000.00 moves your payment from $1,285.33 to $2,062.54. Over the loan, that cash costs $296,916.70 this way, or $44,775.16 with a second loan.

New loan amount
$318,000.00
New monthly payment
$2,062.54
Current monthly payment
$1,285.33
Change in monthly payment
$777.21
Loan-to-value after the cash-out
70.67%
Cost of the cash: cash-out refinance
$296,916.70Extra paid over the loan, compared with borrowing nothing.
Second loan payment
$582.08On top of your current $1,285.33.
Cost of the cash: second loan
$44,775.16
Lower lifetime cost
Keep the loan, add a second loan

See the step-by-step solution ↓

Your three choices
Your three choices
PlanMonthly paymentTotal to payCash in hand
Keep the loan, no cash$1,285.33$385,598.40$0.00
Cash-out refinance$2,062.54$742,515.10$60,000.00
Keep the loan, add a second loan$1,867.41$490,373.56$60,000.00

Step-by-step solution

  1. Find the most a lender would let you owe: 80% of the home's value

    $450,000.00×80%=$360,000.00

  2. Subtract what you owe now and the closing costs. What's left is the cash available

    $360,000.00−$250,000.00−$8,000.00=$102,000.00

  3. Find the new loan: your balance, the cash you take, and the closing costs

    $250,000.00+$60,000.00+$8,000.00=$318,000.00

  4. Find your current payment. A standard formula finds the one amount that clears the loan in 300 months, where the monthly rate is the yearly rate ÷ 12

    $250,000.00×0.0031251−(1+0.003125)−300=$1,285.33

  5. Find the new payment. Remember, it replaces your whole mortgage, not only the cash. A standard formula finds the one amount that clears the loan in 360 months, where the monthly rate is the yearly rate ÷ 12

    $318,000.00×0.0056251−(1+0.005625)−360=$2,062.54

  6. See what taking the cash costs on this plan: all its payments and cash costs, minus the rest of your current loan, minus the cash

    $2,062.54×360+$0.00−$1,285.33×300−$60,000.00=$296,916.70

  7. Find the payment on a second loan for the same cash, keeping your current mortgage. A standard formula finds the one amount that clears the loan in 180 months, where the monthly rate is the yearly rate ÷ 12

    $60,000.00×0.0068751−(1+0.006875)−180=$582.08

  8. See what the cash costs on that plan: the second loan's payments minus the cash

    $582.08×180−$60,000.00=$44,775.16

  9. Check how much you'd owe against the home after the cash-out

    $318,000.00$450,000.00=70.67%

Test yourself

20 quick questions built from this calculator's formula: work out results, predict what happens when an input changes, and work backward from an answer. Every answer comes with the working.

Please note: Results are estimates for planning and comparison. Lenders, banks, and tax authorities may round differently or include fees not modeled here, so confirm figures with your provider before deciding.

What this calculator does

Find out how much cash you could pull from your home, and what it would really cost. Enter your home's value, your mortgage and the new loan's terms. You'll see the cash available, your new payment and the cost of that cash over the life of the loan.

A cash-out refinance replaces your whole mortgage with a bigger one. That's the part most people miss. If your current rate is low, you give it up on your entire balance, not only on the new cash. So this page compares it with keeping your mortgage and taking a separate second loan for the same cash.

Where it's used

Why this math matters outside the classroom:

  • Finding the limit. A homeowner takes 80% of a $450,000 value, then subtracts $258,000 to find $102,000 available.
  • Keeping a low rate. A borrower at 3.75% sees the cash costs about $296,917 by refinancing and $44,775 with a second loan.
  • Budgeting for a project. A family checks whether a payment rising by about $777 a month fits their budget before a remodel.
  • Checking equity left. An owner divides a $318,000 loan by a $450,000 value to find a loan-to-value of about 70.67%.

Grade level and standards: Grades 11–12; Common Core State Standards for Mathematics HSA.SSE.B.4. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.

How to use it

  1. Enter your home's value, your balance, your current rate and the time left.
  2. Enter your lender's loan-to-value limit and the cash you want.
  3. Enter the new rate, the new term and the closing costs.
  4. Enter a second-loan rate and term to compare, then read the cost of the cash on each plan.

What the inputs mean

Home value
Use a realistic figure. Your lender will rely on an appraisal, which can come in lower than you expect.
Lender's loan-to-value limit
Loan-to-value is what you owe as a share of the home's value. Lenders cap it for cash-out loans, and the cap varies by loan type. HUD sets FHA's cash-out limit at 80%. Ask your lender for theirs.
Closing costs
Fees to set up the new loan. If they go into the loan, they reduce the cash available and you pay interest on them.
Second loan rate to compare
The rate on a home equity loan for the same cash. Use a quote if you have one.

Formula and method

largest new loan = home value × loan-to-value limit
cash available = largest new loan − current balance − closing costs in the loan
new loan = current balance + cash + closing costs in the loan
payment = P × i ÷ (1 − (1 + i)^(−n)), where i = yearly rate ÷ 12
cost of the cash = extra paid over the loan, compared with borrowing nothing, − the cash

P is the amount borrowed, i is the monthly interest rate and n is the number of monthly payments. The same formula gives all three payments on the page.

The cost of the cash is the fairest number here. It starts with everything you'd pay on each plan. It takes off what you'd pay anyway on your current loan, and then takes off the cash itself. What remains is the price of getting that money.

For the cash-out, that price includes the higher rate on your old balance and the extra years of payments. For a second loan, your current mortgage stays untouched, so only the new loan counts.

Worked example

Your home is worth $450,000, and you owe $250,000 at 3.75% with 25 years left. The limit is 80%. You want $60,000, at 6.75% for 30 years with $8,000 of closing costs in the loan. A second loan would be 8.25% for 15 years.

  1. Largest new loan: $450,000 × 80% = $360,000.
  2. Cash available: $360,000 − $250,000 − $8,000 = $102,000.
  3. New loan: $250,000 + $60,000 + $8,000 = $318,000.
  4. Current payment: about $1,285.33. New payment: about $2,062.54.
  5. Payment increase: about $777.21 a month.
  6. Cost of the cash this way: about $296,916.70 over the loan.
  7. Second loan: about $582.08 a month, and that cash costs about $44,775.16.

Result: You could take up to $102,000. Taking $60,000 raises your payment by about $777.21, and costs far more over time than a second loan in this example.

Understanding the result

When your current rate is well below the new one, a second loan often costs less over time, even at a higher rate. That's what the example shows.

When your current rate is higher than the new rate, the picture can flip. Then a cash-out also lowers the rate on your old balance. Try your own numbers, because the answer depends on them.

Also compare the monthly payments. In the example, the two payments on the second-loan plan total about $1,867.41, against $2,062.54. But that second loan ends after 15 years, on a different schedule.

Assumptions and limitations

  • All loans have fixed rates and equal payments at the end of each month.
  • You keep every loan to the end, and you take all the cash at the start.
  • The second loan has no closing costs. Enter a slightly higher rate to allow for any.
  • Dollars over the years are added as they are, with no adjustment for inflation.
  • It doesn't include tax effects. Interest on cash used for other purposes may not be deductible.
  • It doesn't include mortgage insurance, which some loans charge.
  • It doesn't check credit, income or the waiting periods lenders may require.
  • Your home secures these loans, so missing payments can put it at risk. This is an estimate, not a loan offer.

Frequently asked questions

How much cash can I take out?

Multiply your home's value by the lender's limit, then subtract what you owe and any closing costs in the loan. At 80% on a $450,000 home with $250,000 owed and $8,000 of costs, that's $102,000.

Is a cash-out refinance better than a home equity loan?

It depends mostly on your current rate. If it's low, keeping it and adding a second loan often costs less. If it's high, a cash-out may win. This page works out both.

Why is the cost of the cash so high in the example?

The new loan raises the rate on the whole balance and adds five more years of payments. So most of that cost comes from the old balance, not the new $60,000.

Does the cash count as income?

Loan money generally isn't income, because you have to repay it. Check with a tax professional about your own case.

Sources

How this calculator is checked

Method: Standard level-payment amortization; cash available from a user-entered loan-to-value limit; lifetime payment comparison, undiscounted. FHA's 80% limit read from HUD ML 2019-11. Tests use separate 50-digit decimal arithmetic. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-31. Found a problem? Tell us.

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