The Quick Read: For most homeowners, borrowing the full value of the home is not possible. The standard conventional cash-out refinance on a one-unit principal residence stops at 80% of the appraised value, and 75% on two- to four-unit homes and second homes. One narrow wholesale lane reaches 89.99%, and the VA program is the main exception that goes higher. Whatever the cap, the cash you actually receive is lower, because the payoff, other liens and closing costs come out first.
What a Cash-Out Refinance Actually Does
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 as cash. The lender sets the new loan against the appraised value of your home, not what you paid for it.
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: 7.32% as of October 22, 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.
That differs from a refinance, which changes the rate or term without pulling meaningful cash. Lenders call that a “limited cash-out” refinance. Because you take little or no cash, it can reach much higher leverage: up to 95% LTV on a one-unit principal residence in the programs Lendmire places files with, and 97% where the first-time-buyer program applies. Same house, very different ceiling. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
LTV means loan-to-value: the loan balance divided by the home’s value. Lendmire arranges cash-out refinance programs through wholesale lenders in 16 states, and across those programs the cap on cash-out is what separates the two products.
Key Terms Defined
Loan-to-value (LTV): The new loan amount divided by the appraised value, shown as a percentage.
Combined LTV (CLTV): LTV that also counts any second lien that stays open on the home.
Limited cash-out refinance: A refinance that pays off your first mortgage and closing costs, with only incidental cash back.
Seasoning: The time you must have owned the home, or held the loan being paid off, before a lender allows cash out.
Lender overlay: A rule a lender adds on top of the agency’s minimum, often making the real ceiling lower.
Can You Borrow 100% of Your Home’s Value?
Almost never. The federal consumer-finance regulator’s guide to using home equity states that none of the home-equity options lets you turn 100% of your equity into cash.
The cap exists to keep a cushion of equity in the home. With an 80% cap, about 20% of the value stays unborrowed. That cushion protects the lender if prices slip. It also protects you.
The exception is VA. Under VA Circular 26-19-5, VA will not guaranty a refinance when the LTV exceeds 100%, and a financed funding fee counts inside that ratio. So the program ceiling is 100%, but the fee eats part of it. Many lenders set a lower VA cash-out cap of their own. That is a lender overlay, not a VA rule.
Limits by Program
| Program | Cash-out cap | Set by |
|---|---|---|
| Conventional, 1-unit primary (standard) | 80% | Agency guide |
| Conventional, 2–4 unit primary | 75% | Agency guide |
| Conventional, second home | 75% | Agency guide |
| FHA cash-out | 80% of adjusted value | HUD |
| VA cash-out | Up to 100% incl. Funding fee | VA (lenders may cap lower) |
FHA once allowed 85%. HUD Mortgagee Letter 2019-11 lowered it to 80% for case numbers assigned on or after September 1, 2019. FHA also caps the combined first mortgage and other liens at the nationwide mortgage limits.
Occupancy decides leverage. If the home is a second home, the cap is 75%. Rental property follows lower caps still, and that is a different lane from this article.
One wholesale lane is worth knowing. For a thirty-year fixed on a primary residence with a conforming balance, a program reaches 89.99% LTV with no mortgage insurance. It needs a 680 score and a 50% ratio, plus six months of seasoning. It sits above the standard 80% agency cap and still well below 100%. Subject to lender guidelines and full file review.
How the Loan Is Underwritten, Step by Step
1. Appraisal sets the value. For FHA, the lender uses “adjusted value.”
2. The cap is applied. Value times the program cap gives the most the new loan can be.
3. Open liens count. Any second lien that stays open counts toward combined LTV.
4. The payoff comes out. Your current first mortgage, any liens being paid off, closing costs and financed fees all reduce what you receive.
5. Credit and income are reviewed. Conventional wholesale programs start at a 620 decision score. The automated finding governs most files, with a 50% total ratio ceiling. Manually underwritten loans run 36% or 45%, depending on the file.
6. Seasoning is checked. On a conventional cash-out, the first mortgage being paid off must be at least 12 months old, and a borrower must be on title for 6 months. Exceptions exist for delayed financing, inheritance and legal awards.
7. Closing. The new loan pays off the old one, and the balance goes to you.
Here’s the part many borrowers miss: cash is not simply value times the cap minus your balance. Everything in step 4 shrinks it.
A Worked Example in Percentages
Take a one-unit primary home with a current mortgage equal to 50% of its appraised value. With the standard 80% cap, the new loan can reach 80% of value. That leaves 30% of value as the gross room.
Now subtract closing costs and financed fees, which can run to a few percent of the loan. Say they take about 3% of value. Cash in hand falls to roughly 27% of value, not 30%. Add an open second lien of 10% of value that you keep, and the room drops again. The cap is shared, not stacked.
Now suppose the appraisal comes in 5% below what you expected. The same 80% cap applies to a smaller number. Cash shrinks faster than the appraisal does, because the payoff and costs stay fixed. A low appraisal is a common way a “big equity” file turns into a small check.
Where the General Rule Breaks
Limited cash-out looks like “borrowing more.” It can reach 95% or 97% LTV on a one-unit primary residence, but only because it is not a cash-out loan. It pays off your first mortgage, closing costs and a purchase-money second lien, with only incidental cash back. At least one borrower must be on title when the application starts, with documented exceptions for inheritance, divorce awards and certain trusts. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Streamlines are not cash-out. The FHA Streamline allows no cash out, per an FDIC-hosted HUD program summary. It requires a net tangible benefit, meaning the refinance has to improve your position. The VA IRRRL works on the same idea for an existing VA loan. Neither uses equity-based caps. Check HUD Handbook 4000.1 and VA.gov for current specifics.
Manufactured homes. Investor guidelines typically set a much lower cash-out cap for manufactured housing than for site-built homes. Single-width units are limited further.
Buyouts. Paying out an ex-spouse or co-owner can be treated as cash-out or limited cash-out, depending on the investor. Read the current guide rules before assuming either.
Jumbo loans. Above the conforming limit, jumbo lanes take over. The ones Lendmire places files with ask for a 660 decision score, reach 90% leverage and go to $5,000,000, with a 50% ratio ceiling on the fixed lanes. Cash-out caps on jumbo files differ, so confirm them for your loan size. For more, see Lendmire’s piece Jumbo Cash-Out Refinance Limits on a Paid-Off High-Value Home. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
State rules. State law can add limits. Texas, for one, caps cash-out on a homestead by constitution at the agency figure, so the 89.99% wholesale lane is not written there.
Your Real Ceiling Is the Lowest of Several Caps
The published maximum is a starting point. Your real ceiling is whichever of these is lowest:
- The program’s LTV cap
- Loan-size limits
- A lender’s overlay
- What your income supports under the debt-to-income ratio
- State law
- The appraised value itself
A program can allow 80% and a lender can still approve less. That is normal. It is also why two borrowers with the same equity can walk away with different numbers.
Should You Borrow the Maximum?
Usually not. The CFPB notes that a cash-out refinance can extend the time to pay off the mortgage, and the monthly payment may rise because a larger loan replaces the current one. It is also a new loan, so the rate and other terms change on the whole balance. That is the key tradeoff against a second lien, which leaves your first mortgage alone.
The CFPB’s research on cash-out borrowers found that paying off other debts is the most common reason people take cash out, with home repairs second. It also warns that turning other debts into mortgage debt can raise the risk of foreclosure.
Borrow less when:
- Your need is smaller than the cap allows
- Your home’s value has been soft in your area
- The new payment would strain your budget
- You would be rolling short-term debt into a thirty-year loan
Mortgage insurance matters at the edges. It is required above 80% LTV on conventional loans. You can request cancellation at 80% of the original value with good payment history, and the servicer must end it automatically at 78%. That is the Homeowners Protection Act. A cash-out at 80% sits right at that line. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Frequently Asked Questions
Can I get 100% of my home’s value in a cash-out refinance?
Only through a VA cash-out, and even then the financed funding fee counts inside the 100% ceiling. Standard conventional and FHA cash-out loans stop at 80% on a one-unit principal residence. One narrow wholesale conventional lane reaches 89.99% on a qualifying primary residence, still short of full value. Many lenders also cap VA cash-out below 100% with their own overlays.
Why is my cash less than value times the cap minus my balance?
Your payoff, any liens you pay off, closing costs and financed fees all come out of the new loan first. A second lien that stays open also counts against the cap. The cap sets the maximum loan, not the check you receive.
Does the cap change for a second home?
Yes. Occupancy steps the cap down. A conventional cash-out is 80% on a one-unit principal residence and 75% on a second home.
Can I take cash out with an FHA Streamline or a VA IRRRL?
No. The FHA Streamline allows no cash out, and the VA IRRRL is a rate-reduction refinance of an existing VA loan. If you want cash and have a VA or FHA loan, you are looking at a full cash-out refinance instead.
How long must I own the home before taking cash out?
On the conventional programs Lendmire places, the first mortgage being paid off must be at least 12 months old, and a borrower must have been on title for 6 months. Delayed financing, inheritance and legal-award exceptions exist. Seasoning rules are revised, so check the current agency guide.
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
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. 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. CFPB: Using Home Equity guide
3. HUD Mortgagee Letter 2019-11
4. FDIC-hosted FHA Streamline summary
5. 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: Can a Cash-Out Refinance Cover the Full Home Value? · Cash-Out Refinance Limits for Funding a Vacation Home Purchase · How a Lender Sizes a Cash-Out Refinance on an Inherited Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.