Mortgages
Cash-Out Refinance Calculator
A cash-out refinance replaces your mortgage with a bigger one and hands you the difference. The cash is cheap compared with a credit card, but you are borrowing it over decades and often trading a low old rate for a higher new one on the entire balance.
Cash in hand
$50,000
Your loan becomes $308,000 at 6.500%.
The extra interest over the loan's life exceeds the cash you take out. Refinancing a low rate to a higher one applies that higher rate to the whole balance, not just the cash — often the hidden cost that makes a HELOC cheaper for a modest sum.
- New monthly payment
- $1,947
- Current payment
- $1,515
- Payment increase
- $432
- New loan-to-value
- 61.6%
- Total interest on the new loan
- $392,837
- Extra lifetime interest vs not refinancing
- $279,249
How this calculator works
The new loan is the current balance plus the cash out plus any rolled-in closing costs. Payments are standard amortisations of the old balance over its remaining term and the new loan over the new term. Extra lifetime interest compares total interest on the new loan against the interest remaining on the current one — so a longer term or higher rate shows up as a cost even when the payment falls.
Rate and term are yours to enter; a real quote depends on credit, the loan-to-value shown here, and whether it is owner-occupied. Private mortgage insurance above 80% LTV, points, and the tax treatment of the interest are not modelled. Compare the extra interest here against a HELOC before deciding.
Try an example
Frequently asked questions
How does a cash-out refinance work?
You replace your existing mortgage with a larger one and receive the difference in cash. Owe $250,000, refinance into $300,000, and you walk away with roughly $50,000 before costs. The whole balance is now at the new rate and term.
Cash-out refinance or HELOC?
A HELOC or home equity loan leaves your first mortgage alone and charges the new rate only on what you borrow. A cash-out refi resets the entire balance to the new rate. If your existing rate is well below current rates, the refi's higher rate on the whole balance usually costs far more than the second loan.
How much can I cash out?
Most lenders cap a cash-out refinance at 80% of the home's value, counting the new loan. On a $500,000 home that is a $400,000 loan, so if you owe $250,000 you could take up to about $150,000 before costs. VA loans and some programs allow more.
Is the cash taxable?
No. Borrowed money is not income, so the cash-out proceeds are not taxed. Interest is only deductible when the money is used to buy, build, or substantially improve the home securing the loan, and only if you itemise — using it to consolidate debt or invest does not qualify.
When does a cash-out refinance make sense?
When your current rate is close to or above market rates, so resetting the balance costs little, and you have a high-value use for the cash — a renovation that adds value, or clearing debt at a much higher rate. It rarely makes sense purely to lower a payment by extending the term.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.