The Quick Read: Usually less than the equity you have, and less than the “maximum” a lender quotes. The check equals the new loan minus the old mortgage payoff, minus any costs paid from proceeds. On a one-unit primary residence, the new loan is typically capped at 80% of the appraised value, so the cash is roughly 80% of value, less your payoff, less costs. Program figures are subject to lender guidelines and full file review.
The Formula in One Line
The cash you receive is the maximum new loan, minus what the new loan must pay off, minus costs that come out of proceeds. That is the whole formula. Every file is a variation on 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: 7.18% as of November 5, 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.
Three inputs move the number:
- Appraised value. It sets the ceiling.
- Existing payoff. It is the first claim on the new loan.
- Costs. Whether they are financed or paid from proceeds changes the check.
Most explainers stop at “gross cash.” Gross cash is not what lands in your account. The rest of this article carries one example all the way to the deposit.
Dollar amounts vary too much by home to be useful here, so the example uses percentages of the appraised value. Call the appraised value 100%. Multiply by your own value to get your own figures. The assumptions below are modeled, not a quote.
Why Is the Check Smaller Than My Equity?
Equity is value minus what you owe. A cash-out loan does not let you borrow all of it. The lender caps the new loan at a share of value, which leaves a cushion.
For a conventional loan on a one-unit principal residence, the cap is 80% of value. On two- to four-unit principal residences, second homes and investment property, it is 75%. Occupancy and unit count set the leverage. The Fannie Mae Eligibility Matrix lists these caps by occupancy and unit count. The same matrix shows that reserves can apply on cash-out files where the automated finding comes back with a debt-to-income ratio above 45%.
So the most you can walk away with is the cap minus your payoff. On a home worth 100% with a payoff of 60%, the most the loan can pay you is 20%. The equity was 40%. Half of it stays in the house by design.
The Worked Example, Line by Line
Assumptions (modeled): conventional loan, one-unit primary residence, appraised value 100%, existing first mortgage payoff 60% of value, no other liens. Closing costs and prepaids are assumed at 3% of the new loan. That is a hypothetical. In practice, costs run a few percent of the loan and vary by file.
| Line | Share of appraised value |
|---|---|
| Maximum new loan (80% cap) | 80.0% |
| Less payoff of existing mortgage | −60.0% |
| Gross cash available | 20.0% |
| Less costs and prepaids (3% of loan) | −2.4% |
| Approximate net cash to you | 17.6% |
Put in plain words, a homeowner with 40% equity walks out with about 17.6% of the home’s value. The 20% gross figure is half of that equity, and the costs trim it further, so the check ends up smaller still.
Now the variant. If you pay the same costs out of pocket, the loan stays at 80% and the check is the full 20%. You wrote a separate check at closing, so your cash position is about the same either way. The financed route adds interest over time. The CFPB’s Closing Disclosure explainer says rolling costs into the loan reduces upfront costs but adds interest over time.
One trap here. On a file that is already at the cap, financing costs means a smaller check, not a bigger loan.
What Happens if the Appraisal Comes in Low?
A low appraisal shrinks the cap and the check at the same time. The payoff does not move.
Take the same file with an appraisal 5% under the owner’s estimate. Value becomes 95% of the original figure. The 80% cap now produces a loan of 76.0% of the original value. Subtract the same 60% payoff and gross cash is 16.0%. Costs at 3% of the new loan are 2.28%, which leaves net cash of about 13.7%.
Compared with the 17.6% net in the first example, that is a drop of roughly a fifth from a 5% appraisal miss. The smaller the equity, the bigger the damage. Owners with a thin cushion should run the example at a lower value before they count on a number.
Three Equity Levels Side by Side
Same assumptions: 80% cap, costs at 3% of the new loan, value at 100%.
| Existing payoff | Gross cash | Costs | Net cash |
|---|---|---|---|
| 75% of value | 5.0% | −2.4% | about 2.6% |
| 60% of value | 20.0% | −2.4% | about 17.6% |
| 40% of value | 40.0% | −2.4% | about 37.6% |
Costs are roughly fixed in the example because the loan is the same size. That makes them a large bite out of a small check. At 75% payoff the borrower gets about 2.6% of value for a full refinance. Whether that is worth doing is a real question, taken up below.
What If a Second Mortgage or HELOC Is in the Picture?
The cap counts all liens together. The industry term is combined loan-to-value. A second lien uses up cap room whether it stays in place or is paid off at closing.
Say the same home has a first mortgage at 60% of value and a HELOC balance at 10%. If the HELOC stays, the new first loan can reach only 70% of value (80% minus 10%). Subtract the 60% first payoff and gross cash is 10%. If you pay the HELOC off at closing, the new loan runs to 80%, the payoffs total 70%, and gross cash is again 10%. The check is the same. The difference is that the HELOC is gone and one loan remains.
That is why paying off other liens is not “extra” cash. It comes out of the same pot.
Solving Backward: “I Need This Much”
Many owners start with a target and need the loan size. Work backward.
Say you need 10% of the home’s value in your hands after costs, and the payoff is 60%. Costs are assumed at 3% of the loan. The loan must cover the payoff, the target and its own costs: loan × 0.97 = 70%. That gives a loan of about 72.2% of value.
Check it. 72.2% minus the 60% payoff is 12.2% gross. Costs at 3% of the loan are about 2.2%. Net is 10%. The loan is well under the 80% cap, so the file has room.
If the backward number lands above the cap, the target is not reachable on that program. Options are a smaller target, paying costs out of pocket, or a different structure.
What Moves the Number (and What Doesn’t)
Four things decide how much comes out.
1. Program cap. Occupancy and units set it. Conventional primary one-unit is 80%. Two- to four-unit primary, second home and investment property are 75%. In Texas, a cash-out on a homestead (a Section 50(a)(6) loan) is capped at 80% of the home’s value by the state constitution.
2. Existing payoff. A bigger balance means less cash, dollar for dollar.
3. Costs. Title, appraisal, prepaid interest and escrow setup all trim the check. They are described on the Loan Estimate, and a “no closing cost” loan still has them. The CFPB’s loan-cost guide says you pay either through a lender credit funded by a higher interest rate or through a higher loan balance.
4. Credit and ratios. The wholesale conventional programs start at a 620 decision score, and the automated finding governs most files, with a total ratio ceiling of 50%. A manually underwritten file is held to a tighter ratio of 36% or 45%, depending on its reserve and score factors. A weaker file can face reserve requirements or a lower leverage.
One lane works differently. A wholesale cash-out lane reaches 89.99% LTV with no mortgage insurance at a 680 score and a 50% ratio on a thirty-year fixed, primary residence, conforming balance. It has its own six months of seasoning, and it is not written on Texas homesteads. It is the exception to the usual 80% ceiling, and it changes the example: with a higher cap, the same 60% payoff leaves more room. Whether a file fits depends on lender guidelines, the full review and the property.
What does not move it: how much you “need.” The lender sizes to value and payoff, not to your goal.
Waiting Periods That Can Stop the Math
Some files never reach the formula because of seasoning. The first mortgage being paid off generally must be at least 12 months old, counted from note date to note date. At least one borrower must have been on title for 6 months. Freddie Mac’s Guide §4301.5 defines a cash-out refinance as a mortgage with no specific restrictions on the use of proceeds, and it covers a home owned free and clear. It also sets out the six-month title rule and its named exceptions.
Exceptions exist for delayed financing after a recent all-cash purchase, for inheritance and for legal awards. They still price as cash-out and they need purchase documents and proof of source of funds.
A home with no mortgage is still a cash-out when a new loan goes on it. A new loan on a free-and-clear home has no payoff line, so the whole cap becomes gross cash before costs.
Cash-Out vs. Rate-and-Term vs. Streamlines
Not every refinance hands you a check. Knowing the differences keeps you from planning around cash that cannot come out.
| Refinance type | Cash to the borrower |
|---|---|
| Cash-out (conventional) | Yes, within the cap |
| Rate-and-term (limited cash-out) | Only incidental cash back |
| FHA Streamline | Cash above $500 not allowed |
| VA IRRRL | No equity out |
A refinance pays off the existing first mortgage, the closing costs and any purchase-money second lien. Cash back is limited to a small amount. Fannie Mae’s limit is the lesser of 2% of the new loan or $2,000. Freddie Mac’s is the greater of 1% of the new loan or $2,000. A refinance that goes past those limits is treated as cash-out.
The HUD FHA Streamline page says the loan must already be FHA-insured, must be current, must show a net tangible benefit, and that cash above $500 may not be taken out. VA’s Pamphlet 26-7 says an IRRRL cannot be used to take equity out or pay other liens. A VA cash-out loan is the VA path to cash. VA says it replaces your current loan with a new VA-backed loan, you go through a private lender, and the borrower needs a Certificate of Eligibility and must live in the home. VA has its own limit, and lenders may set lower caps. Ask your lender which applies.
Is the Cash Worth the Cost?
It depends on what the cash does. A refinance resets the loan. The monthly payment may rise and the payoff date may move out, a point the CFPB makes in its home equity guide for older Americans. The same guide says lenders typically want you to keep 10–20% of the home’s value as equity.
Run three checks before you apply.
1. Cost against check. In the equity table, a 2.4% cost took a 5.0% gross check down to about 2.6%. That is close to half gone.
2. What you give up. If your current loan carries terms you value, replacing all of it to reach the cash means replacing those terms too. Compare that against keeping the loan and borrowing separately.
3. Where the cash goes. The CFPB’s research on cash-out borrowers says paying off other debts was the most common use. It also found credit card balances drifted back toward pre-refinance levels within a year. Paying off cards with house equity only helps if the cards stay paid.
Your Own Numbers: A Fill-In Worksheet
Work these in order on paper.
1. Estimate the appraised value. Then run it again 5% lower.
2. Multiply by the cap: 80% for a one-unit primary residence on the conventional cash-out program, 75% for the other occupancies listed above.
3. Subtract the payoff of the first mortgage.
4. Subtract any other lien you plan to pay or that stays in place.
5. Subtract costs, using the Loan Estimate once you have one.
6. Compare the result with what you need.
If step six falls short, the next move is a smaller target, paying costs out of pocket, or a different program.
For the program details behind these caps, see Lendmire’s cash-out refinance programs page.
Key Terms Defined
Appraised value: the value a licensed appraiser assigns to the home, which the lender uses to size the loan.
Loan-to-value (LTV): the new loan divided by the appraised value, shown as a percentage.
Combined loan-to-value (CLTV): all liens on the home added together and divided by the appraised value.
Payoff: the amount needed to retire an existing mortgage on the closing date, including accrued interest.
Gross cash: the new loan minus payoffs, before costs come out.
Net cash: what you actually receive after costs and prepaids paid from proceeds.
Limited cash-out: a refinance that pays off the first mortgage and costs and allows only a small amount of cash back.
Frequently Asked Questions
Can I take cash out up to the full 80%?
You can borrow up to the cap, but the cash is not 80% of value. The loan must first pay off your mortgage and any other liens being retired, and costs come out too. On a home with a 60% payoff, the 80% cap yields 20% gross and about 17.6% after assumed costs.
Does paying the closing costs out of pocket give me more cash?
It leaves the check larger, but you spend the same money at the table. Financing costs inside the loan uses up room under the cap and adds interest over time. Costs paid in cash keep the loan smaller. Compare the Loan Estimate’s total closing costs with its “cash to close” line, because they are different numbers.
What if I have a second mortgage or HELOC?
It counts against the cap whether it stays or is paid off. If it stays, your new first loan is sized to leave room for it. If you pay it off from proceeds, gross cash is the same, but you end up with a single loan. Ask the lender how it will be handled before you rely on a figure.
Why would a lender give me less than I asked for?
Usually the appraisal, the payoff or the cap. A 5% lower appraisal cut the example’s net check from about 17.6% to about 13.7% of the original value. A lender can also reduce the loan if the credit, ratio or reserve review does not support the file. Everything is subject to lender guidelines and full file review.
Can an FHA Streamline or VA IRRRL give me cash?
Not in any meaningful amount. HUD says cash above $500 may not be taken out on an FHA Streamline, and VA’s pamphlet says an IRRRL cannot take equity out. A cash-out loan is the route if cash is the goal.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and home buyers in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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
6. CFPB older-Americans home equity guide
7. CFPB: CFPB Report Finds Cash Out Mortgage Refinance Borrowers Improve Credit Scores
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Cash Comes Out of a Cash-Out Refinance When the 30-Year Clock Restarts? · How Much Closing Costs Take From Your Cash-Out Refinance Proceeds · How to Retitle an Inherited 2-4 Unit for a Cash-Out Refinance
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- 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.