Cash-Out Refinance Calculator

New Loan Amount and LTV

The new loan balance is simply your current mortgage balance plus the cash-out amount:

New Loan Amount = Current Balance + Cash Out
LTV = New Loan Amount ÷ Home Value

If LTV exceeds 80%, the calculator displays a warning — most conventional lenders will not approve the transaction above this threshold.

Monthly Payment

Your new monthly payment is calculated using the standard amortization formula on the new loan amount at the new rate and term:

Monthly Payment = Balance × [r × (1 + r)^n] / [(1 + r)^n − 1]

The change in monthly payment is the difference between this new payment and your current payment (computed from your existing rate and remaining months).

Attributing the Cost of the Cash

Not all of the interest on your new loan is "caused" by the cash-out — part of it would exist anyway because you still owe your original balance. The calculator isolates the incremental cost:

1. Compute total interest on the new loan amount at the new rate over the full term
2. Compute total interest on just the current balance at the new rate over the same term
3. Interest on Cash = (1) minus (2)

This is the additional interest you're paying purely because you extracted cash. Add closing costs to get the total cost of the cash.

The Pie Chart

The donut chart shows three slices:

• Cash Received (green): the actual amount you pocket
• Interest on Cash (red): what you pay in interest on the extracted amount
• Closing Costs (orange): upfront fees

The ratio of red to green is the clearest signal of whether the cash-out makes sense. If the interest slice dwarfs the cash you received, a shorter-term alternative like a HELOC or personal loan may be cheaper.

1. Home Renovation or Improvement

Using home equity to fund improvements that increase the home's value is one of the strongest use cases for cash-out refinancing. The interest may be tax-deductible, and the improvement can offset the equity you extracted. Run the numbers here to confirm the interest cost is reasonable relative to the renovation budget, then compare against a HELOC.

2. Debt Consolidation

Consolidating high-rate credit card debt (often 20%+) into a 6–7% mortgage can dramatically reduce monthly payments and total interest. This calculator shows the true interest cost of the cash — compare it against what you'd pay keeping the credit card debt at its current rate and minimum payments. Note that consolidating unsecured debt into secured debt (your home) adds risk: if you can't pay, you can lose the house, not just damage your credit.

3. Comparing Cash-Out Refi vs. HELOC

A HELOC avoids resetting your first mortgage but carries variable rates. Enter your scenarios here (modeling the HELOC as a shorter-term personal loan for comparison purposes) to see which option's total interest cost is lower for your planned use of the funds and repayment timeline.

4. Evaluating the Rate-Lock Tradeoff

If you have a sub-4% mortgage from prior years, a cash-out refi means losing that rate on your entire balance — not just the cash-out portion. This calculator makes that cost visible: if the monthly payment jumps by $600 and the interest on the extracted cash is $90,000 over 30 years, you might conclude that a HELOC at 8% on just the $75,000 for 10 years (total interest: ~$33,000) is far cheaper. Run both options before deciding.

5. Funding a Major Life Expense

Tuition, a business investment, a vehicle, or medical costs can all be funded through home equity. Use this calculator to see the full 30-year cost of borrowing via cash-out refi, then compare it to alternatives with shorter repayment timelines. Home equity is often the cheapest borrowing rate available — but the true cost over 30 years can still be surprising.