Cash Out Refinance Calculator

by
Cash Out Refinance Calculator
Standard Cash-Out RefinanceCalculate Maximum Cash Available
Results:
New Loan Amount:
$0.00
Monthly Principal & Interest:
$0.00
Estimated LTV Ratio:
0.00%
Remaining Home Equity:
$0.00
function calculateRefi(){var homeValue = parseFloat(document.getElementById('home_value').value);var balance = parseFloat(document.getElementById('current_balance').value);var cashOut = parseFloat(document.getElementById('cash_out_amt').value);var rate = parseFloat(document.getElementById('interest_rate').value);var term = parseFloat(document.getElementById('loan_term').value);var costs = parseFloat(document.getElementById('closing_costs').value);var rollCosts = document.getElementById('roll_costs').checked;var warning = document.getElementById('warningMsg');warning.style.display = 'none';if(isNaN(homeValue)||isNaN(balance)||isNaN(cashOut)||isNaN(rate)||isNaN(term)||isNaN(costs)){alert('Please enter valid numeric values in all fields.');return;}var baseLoan = balance + cashOut;var totalLoan = rollCosts ? (baseLoan + costs) : baseLoan;var ltv = (totalLoan / homeValue) * 100;if(ltv > 80){warning.innerHTML = "Notice: Your Loan-to-Value (LTV) ratio is " + ltv.toFixed(2) + "%. Most lenders require an LTV of 80% or less for cash-out refinancing. You may need a higher credit score or pay Private Mortgage Insurance (PMI).";warning.style.display = 'block';}var monthlyRate = (rate / 100) / 12;var totalPayments = term * 12;var monthlyPmt = 0;if(monthlyRate === 0){monthlyPmt = totalLoan / totalPayments;} else {monthlyPmt = totalLoan * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);}document.getElementById('resLoanAmt').innerHTML = totalLoan.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});document.getElementById('resMonthly').innerHTML = monthlyPmt.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});document.getElementById('resLTV').innerHTML = ltv.toFixed(2);document.getElementById('resEquity').innerHTML = (homeValue – totalLoan).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});}

Using the Cash Out Refinance Calculator

A cash out refinance calculator is an essential tool for homeowners looking to leverage their home's equity to receive a lump sum of cash. This process involves replacing your current mortgage with a new loan for a higher amount than what you currently owe, with the difference paid to you in cash at closing. This calculator helps you estimate your new monthly payment and determines if your equity levels meet lender requirements.

To get an accurate estimate, you will need to provide details about your current home value and existing debt obligations.

Current Home Value
The estimated market price of your home today. An appraisal will eventually be required by the lender.
Current Mortgage Balance
The total amount remaining on your existing mortgage loan.
Cash-Out Amount Desired
The specific dollar amount you wish to receive in cash for home improvements, debt consolidation, or other needs.
New Interest Rate
The expected annual interest rate for the new refinance loan.

How a Cash-Out Refinance Works

When you use a cash out refinance calculator, the tool computes the new loan balance by adding your existing mortgage balance to your desired cash amount. If you choose to roll closing costs into the loan, those are added as well. The monthly payment is calculated using the standard amortization formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

  • M: Total monthly payment (Principal and Interest)
  • P: Principal loan amount (Balance + Cash Out + Fees)
  • i: Monthly interest rate (Annual rate divided by 12)
  • n: Total number of payments (Years multiplied by 12)

Calculation Example

Scenario: You own a home worth $500,000 and owe $250,000. You want $50,000 for a kitchen remodel and plan to refinance into a 30-year fixed loan at 6% interest, rolling in $6,000 in closing costs.

Step-by-step solution:

  1. New Loan Amount = $250,000 (Balance) + $50,000 (Cash Out) + $6,000 (Costs) = $306,000
  2. LTV Ratio = ($306,000 / $500,000) = 61.2% (Well within the typical 80% limit)
  3. Monthly Rate = 0.06 / 12 = 0.005
  4. Total Months = 30 * 12 = 360
  5. Monthly Payment = $306,000 * [0.005(1.005)^360] / [(1.005)^360 – 1]
  6. Result = $1,834.63 per month

Common Questions

How much cash can I actually take out?

Most lenders limit your total loan-to-value (LTV) ratio to 80%. This means your new loan amount (existing balance + cash out + fees) cannot exceed 80% of your home's current appraised value. For example, on a $400,000 home, your total debt cannot exceed $320,000.

Are the interest rates higher for cash-out refinancing?

Yes, typically interest rates for a cash-out refinance are slightly higher (usually 0.125% to 0.5% higher) than a standard "rate-and-term" refinance because the lender perceives the loan as higher risk.

Is the cash received taxable?

No, the money you receive from a cash-out refinance is considered a loan, not income. Therefore, you do not have to pay income tax on the funds you receive at closing.

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