The Quick Read: Usually less than 80% of your home’s value, because the cap applies to the whole new loan, not to the cash. The new loan first pays off your old mortgage, any other liens, and any closing costs you finance. What remains is your cash. A low appraisal shrinks that number fast.
On a one-unit primary residence, a conventional cash-out tops out at 80% loan-to-value (LTV). LTV is the new loan divided by the home’s appraised value. Everything is subject to lender guidelines and full file review, and none of it is a commitment to lend.
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.
The Formula in Three Lines
Here is the whole calculation:
1. Maximum new loan = appraised value × the program cap.
2. Gross cash = maximum new loan − payoff of your current first mortgage − any other liens paid off.
3. Net cash = gross cash − closing costs and prepaids that come out of the loan.
The 80% cap is not your cash. It is the ceiling on the entire loan. Freddie Mac’s Guide lists 80% as the maximum for a cash-out on a one-unit primary residence. Across the wholesale programs Lendmire places files with, the same 80% applies on one-unit primary homes. Two- to four-unit primary residences, second homes, and investment properties are capped at 75%. Occupancy sets the leverage.
What Does a Real Example Look Like (in Percentages)?
Skip dollar figures for a moment and think in shares of value. Say your home appraises at 100 units of value. You owe 50 units on the first mortgage. The 80% cap allows a new loan of 80 units. Pay off the 50-unit mortgage and 30 units are left. Financed closing costs and prepaids then come out of those 30.
Now run a heavier balance. You owe 70 units. The same 80-unit loan leaves 10 units before costs. Costs can eat a large slice of that, so a big existing balance can leave very little cash.
And here is the thing most people miss: your equity is not your cash. Equity of 50% of value does not mean 50% in your pocket. The cap keeps 20% of value as your cushion, so your cash is the gap between the cap and what you owe.
Why a Low Appraisal Cuts the Cash So Steeply
Because the cap is a percentage of value, every drop in appraised value cuts the loan by 80% of that drop. Your payoff does not move. So the entire reduction lands on your cash.
Picture a home you believed was worth 100 units that appraises at 95. The loan cap falls by 4 units, from 80 to 76. If you owe 50, your gross cash falls from 30 to 26. A 5% miss in value cut your cash by more than 13%. The smaller the cash, the harder a value miss hits.
The appraised value is the denominator, not your estimate. On some files the automated underwriting system may offer value acceptance, which means no appraisal. Fannie Mae’s value acceptance rules exclude two- to four-unit properties and values of $1,000,000 or more. The offer is also time-limited. Where it is available on a cash-out, it applies only at much lower leverage than the standard cap. Treat it as a bonus, not a plan.
What Comes Out Before You Get Paid
The payoff is not the statement balance. It includes interest accrued since your last payment and may include escrow adjustments. Ask your servicer for a payoff quote. It is usually a bit higher than the balance on your last statement.
The list of deductions, in order:
- Your existing first mortgage payoff. Fannie Mae’s Selling Guide lists paying off the existing first mortgage as an acceptable use of proceeds, provided it is at least 12 months old.
- Other liens you choose or must clear. A home equity line or second loan is usually paid off in the transaction, and it counts against the cap.
- Financed closing costs, points, and prepaid items. The same Selling Guide section allows financing these.
- What is left is yours.
You can pay costs out of pocket instead. Then the loan is smaller by that amount, and the cash the loan hands you is not reduced by those costs. Same pocketbook, different path.
Solving Backward: How Much Value Do You Need?
Say you want a target amount of cash. Flip the formula. The loan you need equals your payoff, plus other liens, plus financed costs, plus your target cash. Divide that loan by 0.80 on a one-unit primary home. The result is the appraised value you need.
If that value is above what a realistic appraiser would find, the target is out of reach at this cap. In that case, the options are a smaller target, a different structure, or waiting until you owe less. Do this math before you spend money on an appraisal.
What Changes the Number
The 80% cap is the starting point. Several things move it or stop it:
| Factor | Effect on cash |
|---|---|
| One-unit primary home | 80% cap |
| Two- to four-unit, second home, investment | 75% cap |
| Low appraisal | Cap shrinks, cash falls |
| Large existing balance | Less room under the cap |
| Financed costs | Reduce cash dollar for dollar |
Beyond that, a few rules decide whether you can cash out at all.
Seasoning. The first mortgage you are paying off must be at least 12 months old, counted from note date to note date. Freddie Mac’s Guide sets the same test. You also generally need a borrower on title for six months. Exceptions exist for delayed financing, inheritance, and legal awards. Delayed financing lets someone who bought with cash recover that money, but cash-out pricing still applies.
Credit and ratios. Across the wholesale programs placed through Lendmire, the floor is a 620 decision score, and the automated finding governs most files with a total debt ratio ceiling of 50%. A cash-out can also trigger reserve requirements. The Fannie Mae Eligibility Matrix notes that minimum reserves apply to cash-out files with automated debt ratios above 45%. Reserves are money you keep after closing. A higher ratio can delay or reduce the cash.
Pricing. Cash-out loans carry a risk-based pricing add-on tied to LTV and credit score. It usually arrives through the rate or points rather than as its own line. Higher leverage costs more. That cost shapes whether taking the maximum makes sense.
Property type. Some property types are restricted from cash-out. Check current guidelines if your home is a manufactured home.
Texas. A Texas homestead cash-out, a Section 50(a)(6) loan, is held to 80% of value by the state constitution and carries its own rules.
The No-Mortgage-Insurance Exception
Mortgage insurance is usually required above 80% LTV on the agency path. Across the wholesale programs placed through Lendmire, one lane reaches 89.99% LTV with no mortgage insurance on a primary residence. It requires a 680 score, a 50% ratio ceiling, a thirty-year fixed loan, a conforming balance, and its own six months of seasoning. It is not written in Texas. Exact terms depend on lender and investor guidelines, credit profile, reserves, and property review.
This is the single exception to the eighty-percent picture above. Everything else here works at the standard caps. Whether a file fits depends on lender guidelines and full review.
Cash-Out Versus Other Ways to Get at Equity
A cash-out replaces your original mortgage. A home equity loan or line of credit leaves the first mortgage in place and adds a second loan. The CFPB’s research on cash-out refinances draws that same distinction.
The choice often comes down to the loan you already have. If your current first mortgage has terms you like, replacing it to get cash gives that up. If your current terms are no better than today’s, a cash-out may fit. A rate-and-term refinance is a different tool: it allows only small incidental cash back. Under Fannie Mae, that is the lesser of 2% of the new loan or $2,000. Under Freddie Mac, it is the greater of 1% of the new loan or $2,000.
Lendmire’s cash-out refinance programs page lays out the options in one place.
What the Cash Costs You Over Time
Taking cash means a larger loan. The CFPB’s home equity guide says a cash-out may extend the time to pay off your mortgage, and your monthly payment may rise because you replace your loan with a bigger one.
Be careful about what you use the cash for. The Federal Reserve’s consumer guide notes that many financial advisers caution against a cash-out to pay down unsecured or short-term debt. You are turning debt with no claim on your house into debt that is secured by it.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
The Right to Cancel Before Cash Arrives
On a refinance of the home you live in, you generally get three business days to cancel at no cost. The CFPB’s rescission rule runs that clock from the last of three events: signing, receiving the cancellation notice, and receiving the key disclosures. Cash is generally released after that window. Plan for the money to arrive after you sign, not on signing day.
Key Terms Defined
LTV (loan-to-value): the loan amount divided by the home’s appraised value.
Payoff: the exact amount needed to retire your current loan, including accrued interest.
Gross cash versus net cash: gross is the loan minus payoffs; net is what is left after costs and prepaids.
Prepaids: items paid at closing in advance, such as the first insurance premium and escrow deposits.
Seasoning: the minimum age a loan or ownership must reach before you can refinance it for cash.
Before You Ask for a Quote
Gather four things first:
1. A payoff quote from your servicer.
2. A realistic estimate of your home’s value.
3. A list of every lien on the property.
4. Your target cash and what it will be used for.
With those, a loan officer can tell you quickly whether the number works.
Frequently Asked Questions
Can I take out 80% of my home’s value in cash?
No. The 80% cap limits the entire new loan on a one-unit primary home. Your payoff, other liens, and financed costs come out first. Only the remainder reaches you.
How much cash is typical?
No guideline sets a typical amount, and no program sets a dollar minimum or maximum. Your own number depends on your home’s value and what you owe.
What happens if the appraisal comes in low?
The loan cap falls with the value, and your payoff stays the same. So your cash drops by more than the value did. A small miss can cut the cash by a much bigger share.
Does a cash-out pay off my second mortgage or HELOC?
It can, and it often does. Any lien you clear comes out of the loan before cash reaches you. If you leave a second lien in place, it counts against the cap and generally needs its own approval to stay.
Can I cash out on a home I just bought?
Not usually. The first mortgage generally must be 12 months old, and a borrower on title for six months. Delayed financing, inheritance, and legal awards are exceptions. Subject to lender guidelines.
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 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.
For the program’s current guidelines, see conventional loan programs.
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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. Freddie Mac Guide, Section 4203.1
2. Fannie Mae Selling Guide B4-1.4-10, Value Acceptance
3. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
4. Freddie Mac Guide, Section 4301.5
5. Fannie Mae Eligibility Matrix
6. CFPB, A look at cash-out refinance mortgages
8. Federal Reserve, Consumer’s Guide to Mortgage Refinancings
9. CFPB, Regulation Z Section 1026.23
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Conventional Cash-Out Refinance vs Keeping Your Current Loan Term · Cash-Out Refinance Requirements With Private Mortgage Insurance on the Existing Loan · How an Appraisal Sizes a Conventional 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
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.