Cash-Out Refinance Calculator 2026
A cash-out refinance replaces your existing mortgage with a larger new loan, with the difference paid to you in cash. Calculate the new monthly payment, break-even months on closing costs, and verify the 80% loan-to-value (LTV) limit for conventional cash-out per Fannie Mae 2026 guidelines.
What Is a Cash-Out Refinance?
A cash-out refinance is a mortgage refinance where you replace your existing home loan with a new, larger loan and receive the difference in cash at closing. For example, if you owe $220,000 on a $450,000 home and refinance into a new $320,000 loan, you receive $100,000 in cash minus closing costs. The cash is yours to use for any purpose (home renovation, debt consolidation, education, investment). Per CFPB consumer education, the new loan is a first-lien mortgage with the same loan structure as your original — a 30-year fixed or 15-year fixed, fully amortizing. Last updated May 2026.
The 80% LTV Rule for Conventional & FHA
For conventional cash-out refinances per Fannie Mae Selling Guide 2026, the new loan cannot exceed 80% of the home's appraised value. On a $450,000 home, that means the new loan is capped at $360,000. If your current mortgage is $220,000, you can extract up to $140,000 in cash (gross) — minus closing costs, you net less. FHA cash-out is also capped at 80% LTV (down from 85% in 2019). VA cash-out is the exception — eligible veterans can go to 100% LTV on a VA cash-out refinance (per VA Lender's Handbook), making it the most generous cash-out program available.
Cash-Out Refi vs HELOC vs Home Equity Loan
Three ways to tap home equity, each with trade-offs. Cash-out refi: replaces your entire mortgage at the new rate — bad if your current rate is much lower (e.g., 3% vs today's 7%), good if rates are stable or falling. Fixed-rate, predictable, 15-30 year amortization. HELOC: a second-lien revolving credit line at a variable rate (prime + margin). Doesn't disturb your low first-lien rate. Best when you need flexibility and have short-term cash needs. Home equity loan: a fixed-rate second-lien lump sum. Like a HELOC but fixed payment. Per CFPB, if your current mortgage rate is below 5%, a HELOC is usually the better choice than a cash-out refi.
Break-Even Months — When the Refi Pays Off
Closing costs on a cash-out refinance run 2-5% of the new loan amount (origination fee, appraisal, title insurance, recording fees, lender credits). The break-even formula is: closing costs ÷ monthly payment savings = months to break even. If your closing costs are $9,000 and the new payment is $150 lower per month, you break even at 60 months (5 years). If the new payment is higher than your current payment (common in 2026 because current rates are above most existing mortgage rates), there is no break-even on payment savings alone — the refi must be justified by the cash extraction itself or by a shorter term. Source: Consumer Financial Protection Bureau, Fannie Mae Selling Guide 2026, Freddie Mac Primary Mortgage Market Survey.
Frequently Asked Questions
What is the max LTV on a 2026 cash-out refinance?
80% for conventional (Fannie Mae/Freddie Mac) and FHA cash-out. 100% LTV for VA cash-out for eligible veterans. The 80% cap means the new loan amount cannot exceed 80% of the home appraised value.
How much cash can I get from a cash-out refi?
Maximum cash = (home value × 0.80) − current mortgage balance − closing costs. Example: $450k home × 80% = $360k max loan, minus $220k balance minus ~$10k closing = ~$130k net cash.
When is cash-out refi a bad idea in 2026?
When your current mortgage rate is well below current rates (e.g., 3% vs 7%). You'd be giving up your low-rate mortgage on the entire balance. In that case, a HELOC (second lien) keeps your low first-lien rate intact.
Are cash-out refinance closing costs deductible?
Generally no for personal use. If you use the cash for substantial home improvements (per IRS rules), the interest may be tax-deductible. Cash used for personal expenses (debt consolidation, vacation) is not deductible. Consult a CPA — interest deductibility rules are strict post-TCJA.
How is the new monthly payment calculated?
Using standard amortization: P × [r(1+r)^n / ((1+r)^n − 1)], where P is the new loan amount, r is the monthly rate, and n is the total payments. The calculator uses the same formula a lender uses.
What is the break-even on a cash-out refi?
Months to recover closing costs from monthly savings. If new payment is $150 lower and closing costs are $9,000, you break even at 60 months (5 years). If the new payment is higher, there is no break-even on payment savings alone — the refi is justified only by the cash extracted.