The Quick Read: Usually less than all your equity. You receive the new loan, minus your payoff and any costs rolled in. On a one-unit primary home, a conventional cash-out reaches 80% loan-to-value, and that cap covers the whole loan, not just your cash.
What Is the Formula for Your Cash?
Your cash equals the new loan amount, minus the payoff of your existing mortgage and other liens, minus any closing costs you finance. The new loan can’t exceed the program’s loan-to-value cap multiplied by the appraised value. Whatever room is left after payoffs and costs is what you can take.
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.
Loan-to-value (LTV) is the new loan divided by the home’s appraised value. A cash-out refinance replaces your current mortgage with a bigger one. The new loan pays off the old one first. You get the difference.
Here is the formula as steps:
1. Start with the appraised value.
2. Multiply by the program’s LTV cap. That is the largest new loan allowed.
3. Subtract what you owe on the first mortgage, including interest owed up to the payoff date.
4. Subtract any second mortgage or HELOC that must be paid off.
5. Subtract closing costs and fees you choose to roll into the loan.
6. What remains is your cash.
Notice what the cap does not do. It doesn’t hand you 80% of your equity. It limits the total loan. Your existing balance eats into it before you see a dime.
How Much Can You Borrow Against Your Home?
On a conventional cash-out refinance, the cap is 80% LTV on a one-unit primary residence. It drops to 75% on two- to four-unit primary residences, second homes, and investment property. Occupancy sets the leverage. Government programs work differently, and one wholesale lane reaches higher leverage than the conventional cap. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Those conventional figures come from the wholesale programs Lendmire places files with. They are subject to lender guidelines and full file review, and none of it is a commitment to lend. If you want the full menu, Lendmire’s cash-out refinance programs page lays out the options side by side.
Two exceptions are worth knowing:
- Texas homesteads. A cash-out on a Texas homestead (a Section 50(a)(6) loan) is capped at 80% of the home’s value by the state constitution. That cap is the law there, not just a program choice.
- The no-mortgage-insurance lane. One wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% total ratio, a thirty-year fixed rate, a primary residence, and a conforming loan balance. It carries its own six months of seasoning. This lane is not written in Texas. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
On the conventional path, mortgage insurance is required above 80% LTV, and that no-insurance wholesale lane is the one exception. A standard conventional cash-out stops at 80%, so mortgage insurance doesn’t come up. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
What Does a Worked Example Look Like?
Run it in percentages of the home’s value. Say you owe 50% of the appraised value on a one-unit primary home. At an 80% cap, the new loan can reach 80%. Subtract the 50% payoff and you have 30% of the home’s value, before costs.
This is a modeled assumption, not a quote. Closing costs financed into the loan come out of that 30%, so your check is smaller.
Here is how the same 80% cap plays out at different balances. All figures are percentages of appraised value, before closing costs.
| You owe | Max new loan | Cash before costs |
|---|---|---|
| 40% | 80% | 40% |
| 50% | 80% | 30% |
| 60% | 80% | 20% |
| 70% | 80% | 10% |
| 75% | 80% | 5% |
| 80% | 80% | 0% |
Now flip the property type. On a duplex primary residence at the 75% cap, owing 50% leaves 25% before costs. Same balance, less cash.
This is why “I have lots of equity” and “I can take lots of cash” are different statements. A homeowner who owes 70% has 30% equity, yet the 80% cap leaves only 10% of the home’s value to borrow, which is a third of that equity.
How Does the Appraisal Change Your Number?
The appraisal sets the value the cap is measured against, so a lower appraisal shrinks your cash dollar for dollar. Your balance doesn’t move. Only the ceiling does.
Take two outcomes for the same home, where you owe 60% of what you hoped it was worth:
| Appraisal result | Max new loan (80%) | Cash before costs |
|---|---|---|
| Value as expected (100%) | 80% of expected | 20% of expected |
| Value comes in 5% lower | 76% of expected | 16% of expected |
In this example, a 5% miss on value cuts your cash from 20% to 16% of the expected value, which is a fifth less. On thin equity it can wipe the deal out. That is why the practical number to plan around is your balance as a share of a cautious value, not the optimistic one.
Where Does Each Dollar Go at Closing?
The new loan is split before you see anything. First the payoff of your old mortgage, then any liens that must be cleared, then financed costs. You get the remainder.
Walk through the closing statement in order:
- New loan amount. The ceiling, or less if you borrow less.
- First mortgage payoff. This includes interest accrued up to the payoff date, so it can be a bit higher than your last statement.
- Other liens. A HELOC or second mortgage is usually paid off and closed, and it counts against the cap.
- Financed closing costs. Appraisal, title, and lender-related charges you roll in come out of the same capped loan.
- Escrow balance. Your old servicer typically refunds the escrow account to you separately. It isn’t part of the capped amount.
- Your cash. What is left.
Rolled-in costs versus costs you pay at closing is a real choice. Roll them in and your check shrinks while your loan grows. Pay them out of pocket and your loan stays smaller. You will see the figures on your Loan Estimate and Closing Disclosure.
A second-lien detail trips people up. Paying off a second mortgage that was not used to buy the home generally makes the transaction a cash-out, even if you take no money. Plan for it.
What Changes the Number Beyond the Cap?
Five things move your cash: appraised value, existing balance, property use, the loan program, and your credit file. Seasoning and reserves can also decide whether you qualify for the cash at all.
- Property use. Occupancy sets the leverage: 80% on a one-unit primary home, 75% on two- to four-unit primary homes, second homes, and investment property.
- Credit and ratios. The wholesale conventional programs start at a 620 decision score. The automated finding governs most files, with a total ratio ceiling of 50%. Manual underwriting is tighter, at 36% or 45% depending on the reserve and score factors.
- Seasoning. The first mortgage you are paying off must be at least 12 months old, counted note date to note date. A borrower must also have been on title for 6 months. Delayed financing (for recent cash buyers), inheritance, and legal awards are the exceptions.
- Reserves. Some files need cash left in the bank after closing. Don’t count on the loan proceeds to supply them.
- Credit events. Waiting periods follow agency rules: four years from a chapter 7 discharge, seven from a foreclosure, four from a short sale or deed-in-lieu. Documented extenuating circumstances can shorten them.
The seasoning clock deserves as much attention as the cap. A homeowner who refinanced eight months ago has not reached the 12-month mark on that loan, so cash-out is not available yet. A borrower who bought with cash last month may qualify under delayed financing instead. Check the dates before you run the math.
How Do FHA and VA Cash-Out Differ?
Both cap the new loan, but at different levels. HUD cut the FHA cash-out ceiling, while VA lets eligible borrowers reach the full appraised value. A VA IRRRL and an FHA Streamline give you essentially no cash.
HUD lowered its FHA cash-out limit and said the change would strengthen the equity left in these loans, per Mortgagee Letter 2019-11. The cap now applies to a measure HUD calls Adjusted Value, and it counts any second lien too. The HUD press release notes that cash-out had become the majority of FHA-insured refinances before the cut. Older guides still showing the previous FHA cap are stale.
VA says a cash-out refinance can reach up to the full appraised value on a home you own and occupy. The VA funding fee, if you finance it, counts inside that ceiling and reduces your cash. Reaching the whole value also leaves no cushion if prices fall.
The streamlines are a different tool. A VA IRRRL pays off the existing VA loan and doesn’t let you receive cash from the proceeds. The FHA Streamline works for an existing FHA loan with no appraisal and limited credit review, and it also doesn’t pay you cash. Both require a net tangible benefit, meaning the new loan must clearly help you.
What Is a Limited Cash-Out Refinance?
A limited cash-out refinance, also called a rate-and-term refinance, pays off your first mortgage, closing costs, and any purchase-money second, with only small incidental cash back. It can reach 95% LTV on a one-unit primary home, because you aren’t pulling out equity. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The agencies set the cash-back limits. Fannie Mae allows the lesser of 2% of the new loan or $2,000. Freddie Mac allows the greater of 1% of the new loan or $2,000. Buying out a co-owner under a written agreement also counts as limited cash-out at both agencies.
| Feature | Cash-out | Limited cash-out | Streamline |
|---|---|---|---|
| Cash back | Yes, the remainder | Small incidental amount | Essentially none |
| One-unit primary cap | 80% LTV | 95% LTV | Existing-loan based |
| Appraisal | Yes | Yes | Often waived |
| Best for | Using equity | Changing the loan | Existing FHA or VA |
If your real goal is a different loan, not cash in hand, limited cash-out lets you reach for more leverage. If your goal is cash, it won’t get you there.
How Much Should You Actually Take?
Take what you need, not what the cap allows. Every dollar of cash adds to the balance you repay, and a larger loan can raise the monthly payment and stretch the payoff timeline.
The CFPB’s consumer guide says exactly that: you replace your mortgage with a bigger one, so the payment may rise and the payoff may take longer. Borrowing the maximum also pushes your LTV close to the cap, which leaves little equity if values slip.
A few honest points on the decision:
- A cash-out replaces the whole loan. If your current loan has terms you like, you give them up for the bigger loan. That tradeoff is real, and a limited cash-out or a separate second loan may fit better.
- Use matters. Cash that pays for a lasting improvement is a different decision from cash that pays down short-term debt you might run up again.
- Thin margins hurt. If the new payment barely fits your budget, the extra cash isn’t free.
The stronger play for many homeowners is borrowing a modest amount, well under the cap. Others with a clear high-value use will take most of it. This is a genuine judgment call, and neither answer is wrong.
How Can You Check Your Number Before Applying?
Use a six-line self-check. It takes a few minutes and tells you whether the cash is worth pursuing.
1. Estimate a cautious home value, not a hopeful one.
2. Multiply by your program’s cap: 80% for a one-unit primary home, 75% for the other conventional cases.
3. Subtract your mortgage balance, plus any HELOC or second.
4. Subtract the costs you expect to finance.
5. Check seasoning: the 12-month first-mortgage test and the 6-month title test.
6. Compare your credit, ratio, and reserves to the figures above.
If the result is small or negative, the refinance may not be worth the trouble. If it clears comfortably, you have a realistic target to bring to a loan officer. The final figure depends on the appraisal, the full file review, and lender guidelines.
Key Terms Defined
Loan-to-value (LTV): the new loan divided by the home’s appraised value.
Cash-out refinance: a new, larger mortgage that pays off the old one and leaves you the difference in cash.
Limited cash-out refinance: a refinance that changes the loan but gives back only a small incidental amount of cash.
Seasoning: the waiting period a loan or ownership must meet before you can refinance for cash.
Delayed financing: an exception that lets someone who bought with cash refinance for cash without waiting out the usual title period.
Mortgage insurance: coverage the borrower pays for on loans above 80% LTV on the conventional path. It can be requested off at 80% of the original value and ends automatically at 78%.
Net tangible benefit: the clear, measurable gain a streamline refinance has to show.
Frequently Asked Questions
Can I take out all of my equity?
No. The loan-to-value cap applies to the whole new loan, and your existing mortgage is paid off first. On a one-unit primary home at an 80% cap, you can reach only the equity above that line, minus costs. A wholesale lane reaching 89.99% LTV exists for qualifying borrowers, but it is still short of all of your equity. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Do closing costs reduce my cash?
Yes, if you roll them into the loan. Financed costs come out of the same capped amount, so your check shrinks. Paying them at closing leaves your cash larger but takes money from your pocket. Your Loan Estimate and Closing Disclosure show which approach applies.
Does a second mortgage or HELOC change how much I get?
Yes. A second lien is usually paid off at closing, and it counts against the cap. Paying off a second that wasn’t used to buy or build the home generally makes the transaction a cash-out. Your available cash falls by that balance.
How soon after buying or refinancing can I take cash out?
The loan you are paying off must be at least 12 months old, counted note date to note date. Delayed financing, inheritance, and legal-award exceptions exist for specific situations.
Is a cash-out the same as a home equity loan?
No. A cash-out replaces your first mortgage with one new loan. A home equity loan or HELOC adds a second loan on top of the one you have. Which fits better depends on how you feel about your current loan terms and how much cash you need.
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.
For current guidelines and terms, see Lendmire’s refinance programs page.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. 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. HUD Mortgagee Letter 2019-11
2. HUD press release on the FHA cash-out change
3. VA Home Loans: Purchase and Cash-Out Refinance
5. CFPB guide to using home equity
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 a Cash-Out Refinance Lends Versus a Personal Loan · How Much Cash Comes Out of a Cash-Out Refinance With High Equity and Low Income? · Cash-Out Refinance vs Home Equity Loan Without a Hard Credit Inquiry
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
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.