The Quick Read: It depends on your home’s appraised value, the loan-to-value (LTV) limit for your program, and what gets paid off first. On a conventional loan, the limit is 80% LTV on a one-unit primary home. The new loan has to cover your current mortgage, any other liens you clear, and the closing costs you finance. Whatever is left is your cash. Program figures are subject to lender guidelines and full file review.
The Formula in One Line
The cash you receive equals the new loan amount, minus your payoff, minus other liens you clear, minus closing costs you finance or pay out of proceeds. The LTV limit caps the new loan. It does not set the cash itself.
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.
Here is the arithmetic in plain terms, with no dollar figures. Take your appraised value and multiply it by the program’s LTV limit. That gives the largest loan the program allows. Subtract your current mortgage balance. Subtract any second lien or home equity line you must clear. Subtract the closing costs that come out of the loan. What remains is your net cash.
Two details trip people up. The LTV limit covers all liens combined, so the payoff comes out first. And the number the lender quotes as the maximum loan is a gross figure. The check you receive is smaller.
What Is the Maximum Loan on Each Type of Cash-Out?
| Program | Cash-out leverage | Who it fits |
|---|---|---|
| Conventional | 80% LTV, one-unit primary home | Most homeowners with a conventional or non-agency loan |
| Conventional, 2-4 units, second home, investment | 75% LTV | Multi-unit and non-primary properties |
| Conventional, no-MI wholesale lane | Up to 89.99% LTV | 680 score, 50% ratio, 30-year fixed, primary residence, conforming balance |
| VA cash-out | Up to the home’s value for eligible borrowers; some lenders set tighter limits | Eligible veterans living in the home |
| FHA Streamline | Essentially no cash | Existing FHA loans only |
One wholesale lane stretches conventional leverage to 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% ratio, a 30-year fixed rate, a primary residence, a conforming loan balance, and its own six months of seasoning. It is the exception to the usual rule that conventional cash-out tops out at 80%. 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, and that wholesale lane is not written there. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Worked Example, Line by Line (in Percentages)
Say a homeowner has a one-unit primary home. The current mortgage balance is 50% of the appraised value. They apply for a conventional cash-out at the 80% limit.
1. Maximum new loan: 80% of appraised value.
2. Less current mortgage payoff: 50% of appraised value.
3. Gross equity available: 30% of appraised value, the amount left after the current mortgage payoff.
4. Less financed closing costs and any other liens cleared: a further slice, which varies by file.
5. Net cash to the borrower: the 30% gross figure, minus those costs.
So a home with a 50% balance can free up less than 30% of its value. The remaining 20% of value stays in the home as equity. The CFPB’s housing guide notes that lenders typically want you to keep 10% to 20% of your home value as equity, which fits the conventional cap.
Now flip it. A homeowner whose balance is already 70% of value has only 10% of gross room under the 80% cap. After costs, the cash could be thin enough that the refinance stops making sense. Not worth it.
What Shrinks Your Check
Four things sit between the maximum loan and your net cash, and your credit profile decides whether the loan is available at all.
- The appraisal. Value drives the cap. A lower appraisal shrinks the maximum loan dollar for dollar at the same LTV. If you expected a higher number, your cash drops with it.
- Your payoff and other liens. A second mortgage or home equity line must be cleared in a cash-out, and it comes out of proceeds before you see anything.
- Closing costs. If you finance them or pay them from proceeds, they reduce net cash. A Loan Estimate shows the actual figures for your file.
- Pricing add-ons. Conventional cash-out loans carry pricing adjustments based on LTV and credit score. Fannie Mae’s Selling Guide describes these loan-level price adjustments, which affect cost and, if financed, your net cash.
Credit and ratios gate the loan itself. The wholesale conventional programs start at a 620 decision score, while the separate no-mortgage-insurance lane up to 89.99% LTV asks for a 680 score. For most files the automated finding governs, with a total ratio ceiling of 50%. Reserve requirements and the final decision depend on lender guidelines and a full file review.
What If the Appraisal Comes In Low?
Run the same example with the appraisal 5% below what the homeowner expected. The 80% cap now applies to a smaller value. The payoff stays the same. The gap between the two shrinks, so net cash falls by more than the 5% appraisal drop would suggest.
That is the leverage effect: a small miss on value is a bigger miss on cash. Homeowners who plan around a very specific cash target, such as a renovation budget, should build in room for this.
Working Backward From the Cash You Need
Start with the target. Add your current payoff, any other liens, and estimated closing costs. That total is the new loan you need. Divide it by your estimated home value. If the result is above the program’s LTV limit, the refinance will not reach your target. If it lands comfortably below, you have room.
If the number lands just under the cap, one appraisal surprise ends the plan. Ask whether you need the full amount or whether a smaller draw works.
Should You Take the Maximum?
Not automatically. The CFPB notes that a cash-out replaces your mortgage with a larger loan, so the payment may rise and the payoff time may lengthen. Adding cash to the loan also increases the interest paid over its life.
Borrowing the full amount leaves the thinnest cushion. If home values dip, you could owe close to what the home is worth. A smaller draw keeps more equity and a lighter payment.
Consider the decision from the purpose side:
- Paying off debt: clearing balances only helps if the spending habit that built them changes too.
- Covering a short-term gap: a cash-out is a long-term loan. Matching it to a short-term need can cost more than it saves.
- Needing only a small amount: a smaller second loan may leave your existing first mortgage untouched. That is worth comparing.
Rules That Can Block or Reduce a Cash-Out
Seasoning. The first mortgage being paid off must be at least 12 months old, measured from the old note date to the new note date, per Fannie Mae announcement SEL-2023-01. A recent cash-out resets that clock for your next refinance. Borrowers must also generally have been on title for 6 months. Freddie Mac’s Guide names exceptions, including delayed financing for a recent cash purchase and inheritance or legal-award situations. Ask your loan officer how your own ownership history will be reviewed.
Limited cash-out versus cash-out. If you take only a small incidental amount back, the loan is a limited cash-out (rate-and-term) refinance. That is a different loan type from the conventional cash-out capped at 80% LTV on a one-unit primary home, and it allows up to 95% LTV on a one-unit principal residence. Cash above the agency’s allowance flips it to a true cash-out, and cash-out leverage and pricing apply. Fannie Mae’s limited cash-out rules spell this out. A paid-off home with no first lien is also treated as cash-out. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Co-owner buyout. Using a refinance to buy out a co-owner under a written agreement is treated as limited cash-out at both agencies, not as a cash-out.
Free-and-clear homes. Freddie Mac has a specific rule for a cash-out refinance on a home owned outright. Owning without a mortgage does not make the loan “not cash-out.”
Second homes and rentals. Occupancy sets the leverage, and the 75% limit applies outside a one-unit primary home.
Mortgage Insurance and the 80% Line
Conventional mortgage insurance is required above 80% LTV, except in the one wholesale no-MI lane described above. On Lendmire’s conventional program sheet, typical annual premiums run from 0.58% to 1.86% of the balance, though the actual figure depends on the file. When insurance applies, you can request cancellation at 80% of the original value with good payment history, no subordinate liens, and no decline in value. The servicer must end it automatically at 78%. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
For most conventional cash-outs at 80% LTV, mortgage insurance is not a factor. It matters when you reach for the higher no-MI lane or a program that allows more leverage.
FHA, VA, and the Streamlines
An FHA Streamline is not a cash-out product. HUD says cash above $500 may not be taken out. The loan being refinanced must already be FHA-insured and current, and the refinance must produce a net tangible benefit. If you want meaningful cash from an FHA loan, you are looking at a different product.
The VA IRRRL is also a rate-and-payment tool, “VA to VA” only. A VA cash-out is different: it lets eligible borrowers take cash from equity, or refinance a non-VA loan into a VA-backed one, and the borrower must live in the home. A Certificate of Eligibility is needed. VA permits financing up to the home’s value for eligible borrowers, though lenders may set tighter limits.
Above the conforming loan limit, jumbo lanes take over. They require a 660 decision score, allow leverage up to 90%, and go to loans of $5,000,000 with a 50% ratio ceiling on the fixed lanes. Cash-out specifics on jumbo vary by lender.
When Does the Money Arrive?
Funds are not released at the closing table. A refinance on your primary residence carries a three-business-day right to cancel, and business days include Saturdays. Funds generally are not disbursed until that window passes. If you cancel, your original loan stays in place. The right does not apply to a second or vacation home. Waiving the window is allowed only for a bona fide personal financial emergency, with your own dated, signed statement.
Cash-Out Versus a Home Equity Loan or Line
A cash-out replaces your first mortgage entirely. A home equity loan or line sits behind it as a second lien. If your existing first mortgage is one you want to keep, a second lien lets you borrow without touching it. If your current loan is the one you want to change, a cash-out does both jobs in one transaction. Compare the combined cost of each path on your actual loan estimates.
Before You Talk to a Lender: A Self-Check
- Estimate your home’s value, then multiply by the program’s LTV limit.
- Subtract your current balance and any second lien.
- Subtract a cushion for financed closing costs.
- Check that your first mortgage is at least 12 months old and that you have been on title for 6 months.
- Decide the smallest amount that meets your need, not the largest available.
- Look at what the larger balance does to your monthly budget over the long term.
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. Lendmire’s cash-out refinance programs page lays out the options, and every figure remains subject to lender guidelines and full file review. Nothing here is a commitment to lend.
Key Terms Defined
Loan-to-value (LTV): The new loan balance divided by your home’s appraised value.
Limited cash-out refinance: A refinance that pays off your loan and costs and returns only a small incidental amount of cash.
Seasoning: The minimum time you must hold a loan or title before refinancing.
Net tangible benefit: A measurable improvement for the borrower that streamline programs require.
Loan-level price adjustment (LLPA): A pricing add-on that Fannie Mae applies to certain cash-out loans based on LTV and credit score.
Frequently Asked Questions
Can I take out all of my equity?
No. Programs cap total borrowing at a share of value, and conventional cash-out stops at 80% LTV on a one-unit primary home. VA comes closest to full value for eligible borrowers, and some lenders set tighter limits. Payoffs, other liens, and costs also come out before you receive cash. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Does rolling closing costs into the loan make it a cash-out refinance?
Not by itself. Financing costs into a refinance where you receive no material cash is generally a rate-and-term refinance. A true cash-out is when you receive cash above the small allowance. Financed costs do reduce any net cash you do receive.
Can I get cash out of an FHA Streamline?
No, not in any meaningful amount. HUD caps cash at $500, and the loan being refinanced must already be an FHA loan. If you want substantial cash from equity, look at a cash-out refinance instead.
How long must I own the home before a cash-out?
Generally six months on title, with exceptions for delayed financing after a cash purchase, inheritance, and legal awards. The loan being paid off must also be at least 12 months old, note date to note date. Wholesale lanes can add their own seasoning.
Does a cash-out refinance affect my monthly budget?
Usually, yes. A larger loan replaces the current one, so the payment may rise and the term may lengthen, and financing the cash adds interest over the life of the loan. Weigh the amount you borrow against what you actually need.
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. CFPB, Using Your Home Equity Guide
2. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
5. Fannie Mae Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions
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 After Buying and Seasoning? · How Much Cash Comes Out of a Cash-Out Refinance Based on Your Home’s Value? · How Much Cash Comes Out of a Cash-Out Refinance to Make a Gift to a Child Buying a Home?
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
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.