The Quick Read: Your cash is the new loan minus what must be paid off and minus the costs of closing. The program’s leverage cap and the appraised value set the size of the new loan. On a one-unit home you live in, conventional cash-out typically tops out at 80% of the appraised value, subject to lender guidelines and full file review. Payoffs and costs decide how much of that room reaches your bank account.
Cash-out refinance estimate
The starting figures are an example value with a balance and a cash request in proportion. Replace them with yours.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the agency cap on a one-unit principal residence, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a cash-out refinance quote; a cash-out loan is priced by the lender at lock. The cash available is the loan the program cap allows less the balances paid off, before closing costs, which are not included. The HELOC line is the program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages.
The Formula in Three Lines
Here is the whole calculation:
1. Maximum new loan = appraised value × the program’s loan-to-value (LTV) cap. LTV is the loan balance as a percentage of the home’s value.
2. Gross cash = maximum new loan − your current mortgage payoff − any other liens being paid off.
3. Net cash = gross cash − closing costs, prepaid items and fees that come out of the proceeds.
Two things move the answer most: the appraisal and the payoff. Costs trim what’s left.
Many online examples stop at line two. That number is what fits under the cap. It is not what lands in your account. Keep the two apart as you read.
What a Cash-Out Refinance Actually Is
A cash-out refinance replaces your current mortgage with a larger one. The new loan pays off the old one, and you receive the difference. A refinance, by contrast, only swaps the loan. It pays off the old mortgage and the closing costs, with just a small amount of cash back.
Lendmire arranges both kinds through wholesale lenders in the 16 states where it does consumer lending. Its cash-out refinance programs sit on the conventional side. Across the wholesale programs it places files with, the cap, not the borrower’s wish, is usually what stops the number from growing.
Why You Can’t Take 100% of Your Equity
Equity is what the home is worth minus what you owe. Lenders won’t lend against all of it. They want a cushion in case values fall.
On a conventional cash-out for a one-unit principal residence, the cap is 80% of value. Two- to four-unit principal residences, second homes and investment property carry a 75% cap. The Fannie Mae eligibility matrix publishes these limits by occupancy and unit count. Occupancy changes the answer sharply, so a second home reaches less equity than the home you live in.
One wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score and a 50% total ratio. The loan must be a thirty-year fixed on a primary residence with a conforming balance. It carries its own six months of seasoning. It is not written in Texas, where the state constitution caps a homestead cash-out at the agency figure. Everything here is subject to lender guidelines.
A Worked Example in Percentages
Measure everything against what you think the home is worth. Call that 100. Assume your payoff is 50 and closing costs and prepaids total 3. The 3 is a modeled assumption, not a quote.
At an 80% cap:
- Maximum loan: 80.
- Gross cash: 80 − 50 = 30.
- Net cash if costs come out of the proceeds: 30 − 3 = 27.
So you walk away with about 27% of the home’s value. Not 50%, and not even 30%.
What a Lower Appraisal Does
The appraisal is the lever most borrowers can’t control. This table keeps the same payoff and the same modeled costs. Only the appraised value changes, measured against your original estimate of 100.
| Appraised value | Max loan at 80% | Payoff | Net cash |
|---|---|---|---|
| 100 | 80 | 50 | 27 |
| 95 | 76 | 50 | 23 |
| 90 | 72 | 50 | 19 |
| 100, payoff of 80 | 80 | 80 | −3 (cash to close) |
A 10% miss on value cuts your net cash by nearly a third in this example. The last row shows the zero case. If you already owe 80% of the home’s value, there is no room left. The “cash-out” would leave you paying the costs yourself. Lendmire’s piece Cash-Out Refinance Appraisal: How the Value Sets the Check You Walk Away With goes deeper on this.
Pay Costs in Cash or Roll Them In?
You can pay closing costs out of pocket, or you can let them come out of the loan. Either way, they fit under the same cap.
| Item | Costs rolled into the loan | Costs paid in cash |
|---|---|---|
| Loan amount (example) | 80 | 80 |
| Payoff | 50 | 50 |
| Costs from proceeds | 3 | 0 |
| Cash in your account | 27 | 30 |
| Out of pocket at closing | 0 | 3 |
The loan is the same size in both columns. The difference is whether the 3 comes from the proceeds or from your own funds. If you need the check to reach a specific number, the cash-in-hand column is the one to plan around. Whichever you choose, your Loan Estimate shows estimated closing costs and estimated cash to close in one place. The CFPB’s Loan Estimate explainer shows where those lines sit on the form.
What Else Gets Subtracted at the Table
Payoff is more than the balance on your last statement. Expect these items between the loan amount and your deposit:
- Interest accrued on the old loan up to the payoff.
- Prepaid items, such as the first insurance premium and a starting escrow deposit.
- Title and recording charges.
- Other liens the lender requires paid off, such as a home equity loan or line.
- Any debts you ask to pay at closing. Each one comes straight out of your cash.
Some of this comes back. Your old escrow account balance is typically refunded to you after the old loan is paid. Treat it as a small add-back, not part of the plan.
Working Backward From the Check You Need
Say you need a certain amount in hand. Run the formula in reverse:
1. Add your payoff, the cash you need, and the costs coming out of proceeds.
2. That total is the loan you must borrow.
3. Divide it by the appraised value. If the result is at or under the cap, the math fits.
In the example, you want 20 in hand. Payoff 50 + cash 20 + costs 3 = a loan of 73. That is 73% of a home appraised at 100, comfortably under 80%. If the appraisal comes in at 90, the same loan is about 81% of value, which is over the cap. The target shrinks, or the plan changes.
What Can Shrink Your Number
Several things can reduce the loan below the cap:
- Appraisal. A lower value lowers the ceiling.
- Occupancy and property type. A two- to four-unit home or a second home gets 75%, not 80%.
- Credit and ratios. The wholesale conventional programs start at a 620 decision score. Your total ratio, meaning your debts as a share of income, is capped at 50% on most automated files. A manually underwritten loan runs 36% or 45%.
- Reserves. Some files need months of payments left in the bank after closing.
- Seasoning. This is the waiting-period rule. The mortgage being paid off must be at least 12 months old, measured note date to note date. At least one borrower must have been on title for six months. Freddie Mac’s Guide section 4301.5 spells out both clocks, and also requires all borrowers to occupy a primary residence. Delayed financing, inheritance and legal-award exceptions exist.
- Subordinate liens that stay. A second lien left in place counts toward the combined LTV cap.
Edge Cases Where the Rule Bends
Limited cash-out. On the rate-and-term side, only a small, capped amount of cash back is allowed. Exceed it, or pay off a non-purchase second lien, and the loan reprices and re-caps as a full cash-out. Fannie Mae’s Selling Guide B2-1.3-02 governs this. For a one-unit principal residence, rate-and-term goes to 95% LTV, or 97% where the existing loan is agency-owned and the first-time-buyer program allows. Mortgage insurance applies above 80%. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Streamline refinances. The FHA Streamline and the VA IRRRL (the VA’s interest rate reduction loan) are built for people who already hold FHA or VA loans. They skip most of the underwriting and, with it, the cash. The VA’s IRRRL page states the borrower may not receive cash from the proceeds. The FHA Streamline allows only minor closing adjustments. If you want cash from a government-backed loan, that is a different product with its own cap.
Delayed financing. If you bought the home with cash, a cash-out can be available before the usual waiting periods. The purchase and its funds have to be documented.
Inheritance, divorce and co-owner buyouts. Waiting periods can be waived in these cases, under lender and agency guidelines.
Texas. Some states add their own limits. Texas is the clearest example.
From Approval to Money in Hand
Once the lender completes the review, the Closing Disclosure gives you final numbers ahead of closing. Compare it line by line to the Loan Estimate.
On a refinance of a home you live in, a short right-of-rescission period follows signing. Funds are not released until it ends. Cash then arrives by wire or check, as your closing instructions direct. Plan to spend the money only after you have it.
What the Cash Costs You
The new loan is bigger and restarts your term. Your payment, including taxes and insurance, will usually rise. Compare the “Projected Payments” section of the Loan Estimate against what you pay today. At an 80% cap, conventional cash-out generally carries no mortgage insurance. Above 80%, mortgage insurance applies. You can request cancellation at 80% of original value, and the servicer must end it automatically at 78%.
Cash-out loans also usually price higher than a rate-and-term refinance, because lenders treat them as riskier. The cost shows up in how the loan is priced, so factor it into the decision.
Debt payoff is the most common reason borrowers give for cash-out, according to the CFPB’s research on cash-out borrowers. The same report cautions that paying non-mortgage debts with mortgage debt can raise foreclosure risk. Credit card debt is unsecured. Mortgage debt is secured by your home. That difference matters most when your budget is already tight.
Maximum cash is not the goal. The right number is the smallest check that does the job.
Key Terms Defined
Loan-to-value (LTV): the new loan balance divided by the appraised value, shown as a percentage.
Seasoning: the waiting period a program requires, such as months on title or months since the loan being paid off began.
Limited cash-out refinance: a refinance that pays off the first mortgage and costs, with only incidental cash back.
Gross vs. net cash: gross is what fits under the cap after the payoff. Net is what reaches you after costs and fees.
Combined LTV: all loans against the home added together, as a percentage of value.
Frequently Asked Questions
Can I walk away with 100% of my equity?
No. Conventional cash-out on a one-unit principal residence caps at 80% of value, so the lender expects you to keep a cushion. After payoff and costs, the check is smaller still. Program caps and lender guidelines vary by property type and occupancy.
Do I get the cash upfront?
No. The cash arrives at the end of the process, after the loan is documented and signed. On a refinance of a primary home, a rescission window passes before funds are released. The Closing Disclosure shows the final figure.
Are cash-out proceeds taxable?
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
What if my home appraises low?
Your maximum loan falls with it, and so does your cash. If the payoff is large, there may be nothing left. You can wait, pay down the balance, or ask whether a different program fits.
Can a second home reach the same amount of cash as my main home?
Not usually. Conventional cash-out on a second home carries a 75% cap, against 80% on a one-unit principal residence.
Weighing a Cash-Out Against Your Current Loan
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Fannie Mae Eligibility Matrix
2. CFPB’s Loan Estimate explainer
3. Freddie Mac Guide section 4301.5, Cash-Out Refinance Mortgages
4. Fannie Mae Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions
5. U.S. Department of Veterans Affairs, IRRRL Facts
6. CFPB’s research on cash-out borrowers
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Cash-Out Refinance for Owners Asking How Much Equity Comes Out · How Much Cash a Cash-Out Refinance Can Release From Your Home · How to Get the Most From a Cash-Out Refinance on Your Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.