Free Cash Out Refinance Calculator – Estimate Your Savings
A cash-out refinance replaces your mortgage with a bigger one and hands you the difference in cash. This page is for the homeowner who already knows how much cash they want: enter that amount with your current loan and the new terms, and the calculator shows what it does to your payment, whether the new loan stays under the usual 80% loan-to-value line, and how many months of savings it takes to repay the closing costs.
Refinance results
Fixed-rate loans only. The tool models principal and interest, not taxes, insurance, mortgage insurance, or homeowners association dues, and it does not check your cash figure against the 80% maximum: it reports that maximum alongside your figure and warns when you pass it. The verdict line states the total-interest difference as an amount more; a negative difference in that line means the new loan costs less overall, so read the sign, not just the word.
Quick Answer
New loan = current balance + cash out (plus closing costs if you roll them in). On the worked example, a $500,000 home with a $280,000 balance at 7.5% and 25 years left, taking $50,000 out into a new 6.25%, 30-year loan with $6,000 closing costs, gives a new loan of $330,000.00, a new payment of $2,031.87 against a current payment of $2,069.18, a saving of $37.31 a month, and a break-even of 161 months. If you do not yet know how much cash you can take, that is a different question: our cash-out value calculator derives the maximum from your lender’s loan-to-value cap, including a second mortgage, while this page prices an amount you have already chosen.
How to use this calculator
Start from numbers you can verify, then read the payment comparison before the break-even. The tool needs eight figures and one checkbox, and it reports problems with a message rather than guessing.
- Current loan first: enter home value, current balance, current rate, and years left. These four set the current payment and the 80% maximum.
- Your cash figure: enter the cash you want out. A blank cash figure counts as zero, so a blank entry is a no-cash-out refinance, not an error.
- New terms: enter the new rate, the new term, and estimated closing costs. Compare the Loan Estimate figures from your lender with these inputs before trusting the result.
- Roll or pay: leave the roll box unticked to pay closing costs at closing, or tick it to add them to the loan and see cash needed at closing fall to $0.00.
- Calculate: results stay hidden until you calculate. Reset restores the worked-example values and hides the results.
Invalid entries produce a plain message, such as asking for a valid home value or stating that cash out cannot be negative. Fix the entry and calculate again.
Formula
Both payments use the standard fixed-rate amortisation formula, and every other output is arithmetic on those two payments. No hidden fees or adjustments sit inside the math.
Monthly payment = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the loan amount, r is the monthly rate (annual rate ÷ 100 ÷ 12), and n is months. At a 0% rate the payment is simply P ÷ n.
New loan = current balance + cash out (+ closing costs if rolled).
LTV = new loan ÷ home value × 100. Maximum cash at 80% = 0.8 × home value − current balance, floored at zero.
Break-even (months) = closing costs ÷ monthly saving, rounded up, when the payment drops and costs are paid at closing.
Total interest = monthly payment × months − loan amount, counted over the years left for the current loan and over the full new term for the new loan.
The 80% line is a conventional-conforming convention, not a universal legal maximum: VA programs can go higher and lender rules vary, so treat 80% as the usual line for avoiding mortgage insurance on a conventional loan, not as a promise about your offer.
Worked example, verified against the tool
A $500,000 home with a $280,000 balance at 7.5% and 25 years left, taking $50,000 cash out into a new 6.25%, 30-year loan with $6,000 closing costs. Enter those values and the calculator returns exactly the figures below.
| Output | Result |
|---|---|
| New loan amount | $330,000.00 |
| Current payment / new payment | $2,069.18 / $2,031.87 |
| Monthly savings | $37.31 per month |
| New LTV / max cash at 80% | 66.00% / $120,000.00 |
| Break-even on closing costs | 161 months (over 13 years) |
| Interest left on current / total interest on new | $340,752.59 / $401,472.03 |
| Cash needed at closing | $6,000.00 |
The monthly payment drops by $37, but the refinance costs $60,719.44 more in total interest: you borrow an extra $50,000 and restart a 30-year clock. The 161-month break-even means you must stay put for over 13 years before the monthly savings repay the closing costs, and selling or refinancing again before then leaves the refinance underwater on its own costs. This is the trade-off the payment-only view hides.
Roll the $6,000 in instead, and the same example gives a new loan of $336,000.00, a loan-to-value of 67.20%, cash needed at closing of $0.00, and a break-even line reading Fees rolled into loan (no out-of-pocket costs). The payment and total interest both rise with the rolled costs, which is the price of paying nothing at closing.
Reading the results honestly
Three numbers decide whether a cash-out refinance helps, and they can point in different directions on the same application. Read them in this order.
Payment first, but never alone. A lower payment feels like a win, yet a longer term can manufacture it while total interest climbs, exactly as the worked example shows. If the payment rises, the verdict says so plainly: you are paying for the cash, not saving on the mortgage.
Loan-to-value second. At or under the usual 80% line, the verdict expects no mortgage insurance. Above it, expect mortgage insurance or a smaller cash-out, and remember the tool does not shrink your cash figure for you: the warning is the protection, so do not ignore it because the payment still looks affordable.
Break-even third, against your stay. Break-even only counts when the payment drops and costs are paid at closing. If you plan to move in five years and break-even is 161 months, the refinance loses money on its own costs even though the monthly payment falls. Rolling the costs removes the cash break-even question but moves the cost into a larger balance and more lifetime interest.
What this calculator does not model
The tool models fixed-rate principal and interest only. It does not include property taxes, homeowners insurance, mortgage insurance, or homeowners association dues in either payment, and it does not add lender fees beyond the single closing-costs figure you enter. It does not check credit, income, debts, appraisal value, or seasoning, and it does not model adjustable rates, points bought down separately, or a prepayment penalty on the old loan. Use the Loan Estimate from your lender for the real payment, and use this tool for the comparison logic: payment change, loan-to-value, break-even, and total interest. If you are refinancing without taking any cash, our home-loan refinance calculator compares old and new payments on the same balance, and if you want closing costs priced line by line, our cost-to-refinance mortgage calculator prices them in quick and itemised modes.
What competing calculators miss
Most cash-out tools show the new payment and stop, which lets a refinance look cheaper while it restarts the clock and costs more interest overall. ToolDone covers loan-to-value, break-even, and total interest for one scenario, but its break-even example assumes a payment drop and never shows the never-pays-back case. The USFinanceCalculators estimator adds net present value and mortgage insurance removal, which this tool does not model, but it is a general refinance estimator rather than a cash-out-first tool. OnlyCalculators explains the 80% cap and the VA exception well, yet gives no current-versus-new total interest comparison in its tool. Richify and NeftCal both centre break-even, but neither pairs it with a maximum-cash-at-80% line and a rolled-costs mode in one place. This page’s winning moves are the current payment beside the new payment on every result, the total-interest comparison over mismatched terms, the explicit never and rolled break-even states, and the warning that the entered cash figure is never silently capped.
Frequently asked questions
It depends on your home value, your current balance, and your lender’s loan-to-value cap. This calculator reports the maximum cash at the usual 80% loan-to-value line as 80% of home value minus the current balance, floored at zero. It does not cap the cash figure you enter: if you enter more than that maximum, the verdict warns that the resulting loan-to-value exceeds the usual 80% cap, and you should expect mortgage insurance or a smaller cash-out.
Break-even is closing costs divided by monthly savings, rounded up to whole months. With $6,000 of closing costs and $37.31 of monthly savings, break-even is 161 months. If you roll closing costs into the loan, the tool reports Fees rolled into loan (no out-of-pocket costs) instead of a month count. If closing costs are zero, it reports No closing costs entered. If the payment does not drop, it reports Never (payment does not drop).
No. A bigger loan balance or a longer term can raise the payment even at a lower rate, and this tool shows the current and new payments side by side so you compare payments, not just rates. In the worked example the payment falls by $37.31 a month, yet total interest rises by $60,719.44, because the balance grows and a new 30-year clock starts.
Usually yes. A new 30-year term means 30 more years of payments, even if you had only 25 years left on the old loan. That is why this calculator compares total interest on the old loan’s remaining term with total interest on the full new term, rather than letting a lower monthly payment speak for itself.
The closing costs are added to the new loan balance instead of being paid at closing, so cash needed at closing becomes $0.00, but the balance, the payment, and the loan-to-value all rise. In the worked example, rolling $6,000 in makes the new loan $336,000.00 and the loan-to-value 67.20%. Rolling is convenient but never free: you pay interest on those costs for the life of the loan.
Generally no: borrowed money is not income, so the cash itself is not taxed as income. Tax treatment of the interest is a separate question: interest on the cash-out portion is generally deductible only to the extent the proceeds buy, build, or substantially improve the home securing the loan, and rules change, so confirm your position with a tax professional.
Conventional cash-out refinances typically want a score of 620 or higher, with better rates at 700-plus, and lender requirements vary by program and borrower. A score alone never decides approval: equity, income, debts, and the appraisal all matter, and this calculator models none of those underwriting checks.
This page is for when you already know how much cash you want: what does it do to your payment, and when do you break even? The cash-out value calculator answers the other question: how much cash CAN you take at your lender’s loan-to-value cap, including a second mortgage? If you do not yet know the amount, start there; if you know the amount, stay here.
Add This Calculator to Your Website
Embed this calculator on your own site with the code below. Pick a size to preview it live, then copy the code.
Powered by Calculator Zilo
References
- Consumer Financial Protection Bureau. Loan estimate and closing disclosure forms and samples (the standard Loan Estimate and Closing Disclosure forms, including the refinance samples). Accessed October 24, 2026.
- Consumer Financial Protection Bureau. What is a Loan Estimate? (what the Loan Estimate shows: rate, monthly payment, and total closing costs). Accessed October 24, 2026.
- Consumer Financial Protection Bureau. Can my final mortgage costs increase from what was on my Loan Estimate? (which closing costs can change after the Loan Estimate and by how much). Accessed October 24, 2026.
- Freedom Mortgage. Cash Out Refinance Loan-to-Value (LTV) (conventional and FHA cash-out caps at 80% of appraised value and the lender's VA example). Accessed October 24, 2026.
- Consumer Financial Protection Bureau. CFPB Report Finds Cash-Out Mortgage Refinance Borrowers Improve Credit Scores (cash-out borrowers' credit scores and non-mortgage debt paydown, 2014 to 2021). Accessed October 24, 2026.
- U.S. Department of Veterans Affairs. Purchase and Cash-Out Refinance Home Loans (VA purchase and cash-out refinance loans, including the 100% loan-to-value cash-out option). Accessed October 24, 2026.
- Delaware Mortgage Loans. VA Cash-Out Refinance: 100% LTV, Rules and Fees 2026 (the VA ceiling in 38 CFR 36.4306 and why individual lenders may cap below it). Accessed October 24, 2026.
- Lower. How To Refinance Your Mortgage To Eliminate PMI In 2026 (borrower-requested PMI cancellation at 80% and automatic termination at 78% for many covered conventional mortgages). Accessed October 24, 2026.
- LegalClarity. Is Cash-Out Refinance Taxable? What the IRS Says (the $750,000 acquisition-debt cap and the buy, build, or improve test for cash-out interest). Accessed October 24, 2026.
- LegalClarity. IRS Publication 936: Home Mortgage Interest Deduction Rules (refinancing rules: deductible status kept only up to the balance owed, with the excess tested on its use). Accessed October 24, 2026.
- Internal Revenue Service. Publication 936 (2013), Home Mortgage Interest Deduction (the IRS publication behind the mortgage interest rules cited above, including points on a refinance). Accessed October 24, 2026.