Loan basics
Cash-out refinance
Definition
A cash-out refinance replaces an existing mortgage with a larger new loan and pays the difference to the borrower in cash. It resets the rate and term on the whole balance, so it is compared against a HELOC or home equity loan, which leave the first mortgage in place.
Cash-out refinance, explained
Lenders cap the new loan at a maximum loan-to-value that varies by program.
See cash-out refinance in a calculator
The Cash-Out Refinance Calculator shows how this works with real numbers. See your new payment and loan-to-value when you refinance and take cash out.
Open the Cash-Out Refinance CalculatorRelated terms
- Home equity line of credit (HELOC)A home equity line of credit (HELOC) is a revolving credit line secured by a home, typically with a variable rate.
- Refinance break-even pointThe refinance break-even point is the number of months until the monthly savings from a new loan repay the cost of refinancing.
- Loan-to-value ratio (LTV)Loan-to-value (LTV) is the loan amount divided by the property’s appraised value or price, whichever is lower, expressed as a percentage.
Q.01What is cash-out refinance?
A cash-out refinance replaces an existing mortgage with a larger new loan and pays the difference to the borrower in cash. It resets the rate and term on the whole balance, so it is compared against a HELOC or home equity loan, which leave the first mortgage in place.
Q.02How much cash can I take out?
Up to the program’s maximum loan-to-value minus your current balance and costs.
Explain it with their numbers
Calculators turn definitions into a borrower’s real payment — and a lead for you.
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