Use this calculator to estimate the potential loan amount and new monthly payment when cashing out equity from your home. This tool helps you understand the impact of a cash-out refinance on your mortgage terms.
Refinance Details
4.5%
30 Years
Results will appear here.
Understanding Cash-Out Refinance
A cash-out refinance is a type of mortgage refinancing where you replace your existing home loan with a new one for a larger amount. The difference between the new loan amount and your current outstanding mortgage balance is the "cash out" you receive. This cash can be used for various purposes, such as home renovations, debt consolidation, education expenses, or investments.
How the Calculator Works
Our Cash-Out Refinance Calculator helps you estimate the key figures associated with this financial decision. It takes into account your current home's value, your existing mortgage balance, the amount of cash you wish to withdraw, the proposed interest rate and loan term for the new mortgage, and estimated closing costs.
Loan Amount Calculation:
The maximum loan amount is typically based on the Loan-to-Value (LTV) ratio. Lenders usually allow an LTV of up to 80% (or sometimes higher) for a cash-out refinance. The calculator first determines the maximum allowable loan based on your home's value and a standard LTV (often implicitly considered by the user's inputs).
New Loan Amount = Current Mortgage Balance + Desired Cash Out Amount + Estimated Closing Costs
Closing costs are calculated as a percentage of this initial new loan amount.
Monthly Payment Calculation:
Once the final new loan amount is determined, the calculator uses the standard mortgage payment formula (Amortization formula) to estimate the new monthly principal and interest (P&I) payment.
The formula is:
$M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]$
Where:
M = Monthly Payment
P = Principal Loan Amount (New Loan Amount after closing costs)
i = Monthly Interest Rate (Annual Rate / 12)
n = Total Number of Payments (Loan Term in Years * 12)
Key Considerations:
Closing Costs: These can include appraisal fees, title insurance, origination fees, and more. They are typically rolled into the new loan, increasing the total amount you borrow.
Interest Rate: Cash-out refinance rates are often slightly higher than traditional rate-and-term refinances.
Loan Term: Extending your loan term will lower monthly payments but increase the total interest paid over the life of the loan.
Home Equity: Ensure you maintain sufficient equity in your home after the refinance. Lenders have LTV limits.
Purpose of Funds: Consider if the use of the cash aligns with your financial goals and if the cost of borrowing is justified.
This calculator provides an estimate. Actual figures may vary based on the lender's specific policies, your creditworthiness, and current market conditions. It's always recommended to get personalized quotes from multiple lenders.
// Update slider value display and hidden input for interest rate
var newInterestRateSlider = document.getElementById("newInterestRate");
var newInterestRateValueSpan = document.getElementById("newInterestRateValue");
var newInterestRateInput = document.getElementById("newInterestRateNumber");
newInterestRateSlider.oninput = function() {
var value = this.value + "%";
newInterestRateValueSpan.innerHTML = value;
newInterestRateInput.value = this.value;
}
// Update slider value display and hidden input for loan term
var newLoanTermSlider = document.getElementById("newLoanTerm");
var newLoanTermValueSpan = document.getElementById("newLoanTermValue");
var newLoanTermInput = document.getElementById("newLoanTermNumber");
newLoanTermSlider.oninput = function() {
var value = this.value + " Years";
newLoanTermValueSpan.innerHTML = value;
newLoanTermInput.value = this.value;
}
function calculateCashOutRefinance() {
var currentHomeValue = parseFloat(document.getElementById("currentHomeValue").value);
var currentLoanBalance = parseFloat(document.getElementById("currentLoanBalance").value);
var cashOutAmount = parseFloat(document.getElementById("cashOutAmount").value);
var newInterestRate = parseFloat(document.getElementById("newInterestRate").value);
var newLoanTerm = parseFloat(document.getElementById("newLoanTerm").value);
var closingCostsPercentage = parseFloat(document.getElementById("closingCostsPercentage").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = "Results will appear here."; // Reset result
// Input validation
if (isNaN(currentHomeValue) || currentHomeValue <= 0) {
resultDiv.innerHTML = "Please enter a valid Current Home Value.";
return;
}
if (isNaN(currentLoanBalance) || currentLoanBalance < 0) {
resultDiv.innerHTML = "Please enter a valid Current Mortgage Balance.";
return;
}
if (isNaN(cashOutAmount) || cashOutAmount <= 0) {
resultDiv.innerHTML = "Please enter a valid Desired Cash Out Amount.";
return;
}
if (isNaN(newInterestRate) || newInterestRate <= 0) {
resultDiv.innerHTML = "Please enter a valid New Interest Rate.";
return;
}
if (isNaN(newLoanTerm) || newLoanTerm <= 0) {
resultDiv.innerHTML = "Please enter a valid New Loan Term.";
return;
}
if (isNaN(closingCostsPercentage) || closingCostsPercentage maxLoanAllowedByLTV) {
// Adjust cash out or inform user if the request is too high relative to home value and LTV limits.
// For simplicity, we'll cap the loan and inform the user.
var actualLoanAmount = maxLoanAllowedByLTV;
var adjustedCashOut = actualLoanAmount – currentLoanBalance – estimatedClosingCosts;
if (adjustedCashOut < 0) adjustedCashOut = 0; // Ensure cash out isn't negative
resultDiv.innerHTML = "Warning: Your requested loan amount, including cash out and closing costs, may exceed typical lender limits (e.g., 80% LTV). The calculation below is based on the maximum allowable loan amount of $" + formatCurrency(maxLoanAllowedByLTV) + "." +
"Maximum possible cash out in this scenario: " + formatCurrency(adjustedCashOut) + "";
// Use actualLoanAmount for mortgage payment calculation
var principalForPayment = actualLoanAmount;
} else {
// Use the calculated initial new loan amount
var principalForPayment = initialNewLoanAmount;
}
// Calculate new monthly payment (Principal & Interest)
var monthlyInterestRate = newInterestRate / 100 / 12;
var numberOfPayments = newLoanTerm * 12;
var monthlyPayment = 0;
if (monthlyInterestRate > 0) {
monthlyPayment = principalForPayment * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Handle zero interest rate case (less common for mortgages)
monthlyPayment = principalForPayment / numberOfPayments;
}
// Display results
var newLoanTotal = principalForPayment + estimatedClosingCosts; // This should be the same as initialNewLoanAmount if not capped by LTV
var totalInterestPaid = (monthlyPayment * numberOfPayments) – principalForPayment;
resultDiv.innerHTML = "
Estimated Refinance Outcome
" +
"New Loan Amount (inc. cash out & costs): " + formatCurrency(principalForPayment) + "" +
"Estimated Closing Costs: " + formatCurrency(estimatedClosingCosts) + "" +
"Estimated New Monthly P&I Payment: " + formatCurrency(monthlyPayment) + "" +
"Total Interest Over Loan Life: " + formatCurrency(totalInterestPaid) + "";
}
// Helper function to format currency
function formatCurrency(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
// Initial calculation on load for better user experience
calculateCashOutRefinance();