The Quick Read: Usually it is 80% of your home’s appraised value, minus your old mortgage payoff, any other liens and the closing costs you roll in. At that cap, mortgage insurance generally falls away. If you only want the insurance gone, a limited cash-out keeps the cash small.
What Decides the Size of the Check?
The check is whatever is left after the new loan hits its ceiling. There is no flat dollar amount, because the number depends on three things: your home’s value, what you still owe, and what you finance into the loan.
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.
On a one-unit primary home, a conventional cash-out refinance tops out at 80% of value. The Fannie Mae Eligibility Matrix lists that 80% ceiling for a one-unit principal residence. Mortgage insurance on agency loans starts above 80% loan-to-value, so a standard cash-out sits right at the line. That match is an inference from the two rules, not a promise on any single file. Still, it explains why this loan is often how homeowners end PMI and pull cash in one step.
Here is the formula:
1. Take the appraised value and multiply by 80%. That is the largest new loan.
2. Subtract the payoff of your current first mortgage.
3. Subtract any other liens that must be paid, such as a home equity line.
4. Subtract the closing costs and prepaids you choose to finance.
5. What remains is the most cash you can receive.
Run it in percentages. Say your payoff equals 55% of the value. The 80% cap leaves 25% of value before costs. Finance closing costs equal to 2% of value, and the cash drops to about 23%. Those percentages are illustrations, not a quote.
Does Equity Equal Cash?
No. The 80% ceiling keeps at least 20% equity in the home, so you can never pull out all of it. If you own 40% of your home outright, only half of that equity, about 20% of value, is on the table before costs. The rest has to stay put.
What Does the Math Look Like at Different Balances?
The table below shows how the cap works at different payoff levels. These are illustrative percentages of appraised value, before costs, not offers.
| Payoff as % of value | Maximum new loan | Cash before costs |
|---|---|---|
| 55% | 80% | 25% of value |
| 65% | 80% | 15% of value |
| 75% | 80% | 5% of value |
| 80% or more | 80% | — |
Look at the bottom row. If you owe 80% or more of the value, a standard cash-out does not work. You would have no room under the cap. A homeowner at 78% has only 2% of value to work with, and closing costs can erase that. Here is the catch: a small check can still be worth taking if ending the insurance is the real goal. It just means the cash is a side effect, not the point.
Layering in a second lien and costs
Take a borrower whose first mortgage is 60% of value, with a home equity line at 8% of value that must be paid off. The cap leaves 80 minus 60 minus 8, or 12% of value. Roll in closing costs of 2% and the check falls to about 10%. The line payoff comes straight out of the cash, so it is the first thing to account for.
How Does the Appraisal Change the Number?
The appraised value is the base of the whole calculation, so a soft appraisal shrinks your cash in proportion. The matrix measures loan-to-value against current value on a cash-out. Suppose you expected a value of 100 and the appraisal arrives at 95. The cap drops from 80 to 76. With a payoff at 55, the cash falls from 25 to 21 points of the original expected value.
Plan for a cushion. If you need a specific amount of cash, size the request as if the value comes in a few percent lower. A cash-out sized to the last dollar leaves no room for that.
Can You Get Cash Without Mortgage Insurance Above 80%?
Sometimes, on one narrow lane. Mortgage insurance is required above 80% loan-to-value on the agency path, with one exception: a wholesale cash-out lane we place files with reaches 89.99% with no mortgage insurance. It requires a 680 score, a 50% total ratio, a thirty-year fixed rate, a primary residence, a conforming balance and its own six months of seasoning. Lendmire’s cash-out refinance programs page lays out the programs that sit behind it. Exact terms depend on lender and investor guidelines, credit profile, reserves, and property review.
That lane is not written in Texas. A Texas homestead cash-out, known as a Section 50(a)(6) loan, is capped at 80% of the home’s value by the state constitution, no matter the lender.
If your file fits, this lane changes the formula. The ceiling moves from 80% to 89.99%, which raises the cash you can take while keeping insurance off the loan. Whether it does fit depends on lender guidelines and full file review. Nothing here is a commitment to lend.
What If You Only Want the Insurance Gone?
Then a limited cash-out refinance may suit you better than a full cash-out. Freddie Mac calls it a “no cash-out” refinance. Under both Freddie Mac and Fannie Mae, the new loan pays off your existing first mortgage and its costs, with only incidental cash back. Freddie Mac’s Guide Section 4301.4 caps that cash at the greater of 1% of the new loan or $2,000. Fannie Mae sets its own cap, and it was raised in a recent Selling Guide announcement, so check the current Selling Guide limited cash-out section rather than relying on older web pages that still print the old figure.
There is a trap in this lane. Mortgage insurance applies above 80% on the agency path, except for the wholesale no-insurance cash-out lane described earlier. So a limited cash-out only removes PMI if the new loan lands at 80% or below, even where the program would allow more leverage on a one-unit primary home. If you owe more than that, a refinance will not remove it.
Another trap is the home equity line. Paying off a line that was not used to buy the home turns a limited cash-out into a full cash-out. Both agencies treat it that way, and the price of that change is the lower 80% ceiling and the pricing that comes with a cash-out. Check this before you assume the cheaper lane.
Which Option Fits Which Goal?
| Your goal | Best-fit route | Main tradeoff |
|---|---|---|
| Drop PMI and take real cash | Cash-out at 80% or below | Larger balance, closing costs |
| Drop PMI, little or no cash | Limited cash-out | Only works at 80% or below |
| Drop PMI, keep your loan | Request cancellation | Needs enough paydown or time |
| Cash only, keep first loan | Second lien or line | Separate loan, PMI stays |
If cash is the goal, the cash-out math drives everything. If ending the insurance is the goal, the cash is incidental, and cancellation may beat a refinance.
Do You Need to Refinance at All?
Maybe not. You can request cancellation when your balance reaches 80% of the home’s original value. The Consumer Financial Protection Bureau explains that the servicer may ask for a written request, certification that there are no junior liens, and evidence that the value has not declined, often an appraisal. Automatic termination comes at 78% of the original value under the Homeowners Protection Act, as long as you are current on payments.
Two details trip people up. Cancellation under that law is measured against the original value, not today’s. A servicer may agree to use current value under its own policy, but that is the servicer’s choice, and it usually needs an appraisal. Also, cancellation costs little compared with a refinance. If your balance is within a few percent of the 80% mark, extra payments may beat a new loan.
The monthly picture matters too. Ending PMI cuts a monthly cost. Lendmire’s conventional program sheet lists typical annual premiums of 0.58% to 1.86% of the balance, depending on the file. A refinance brings a larger balance, closing costs and possibly cost adjustments tied to leverage and credit score on a cash-out. Those can offset the savings. Compare the full Loan Estimate, not just the line where insurance disappears.
What Can Block a Cash-Out?
Several clocks and limits apply, and each one can stop a cash-out that otherwise looks workable.
- Time on title. At least one borrower generally needs to have been on title for six months. Delayed financing, inheritance and legal-award exceptions exist.
- Age of the loan. The first mortgage being paid off must be at least 12 months old, counted from note date to note date.
- Credit and ratios. The wholesale conventional programs we place start at a 620 decision score, with a 50% total ratio ceiling on automated findings. A cash-out on a larger balance is underwritten in full, so a bigger loan changes the ratios.
- Occupancy. A conventional cash-out is written on a primary residence, a second home or an investment property, and occupancy sets the cap. A one-unit primary home gets the 80% figure, while leverage drops to 75% on two- to four-unit principal residences, second homes and investment property.
- Property and program. High-LTV refinance acquisition is currently suspended at Fannie Mae, per the matrix, so the usual high-leverage options are limited.
This article covers conventional loans only. FHA mortgage insurance is a separate product, and ending it often involves a different refinance path. Nothing here applies to it.
Is It Worth It? Questions to Ask First
A cash-out refinance can make sense when you need the cash anyway and can also end the insurance. It makes less sense when the cash is a stretch goal and cancellation is close. Weigh these questions:
- How far is your balance from 80% of the original value?
- Will the cash replace higher-cost debt or fund a project with a clear payoff?
- How long will you keep the home after closing costs?
- Does the larger balance push your monthly budget more than the insurance savings help it?
Treat the second question as a caution, not a rule. Using cash to pay off other debts only helps if those balances stay paid off.
Key Terms Defined
Cash-out refinance: a new first mortgage larger than your payoff, with the difference paid to you.
Limited cash-out refinance: a refinance that pays off your loan and costs with only a small, capped amount of cash back.
Loan-to-value (LTV): the new loan balance divided by the appraised value.
Private mortgage insurance (PMI): a policy on a conventional loan above 80% loan-to-value that protects the lender, not you.
Seasoning: the time you must have held title or the existing loan before a cash-out is allowed.
Subordinate lien: a second loan on the same home, such as a home equity line, that sits behind the first mortgage.
Frequently Asked Questions
Does a cash-out refinance always remove PMI?
Not on every file. A standard cash-out at 80% or below does not carry it, because mortgage insurance on the agency path starts above 80%. Only the wholesale cash-out lane that reaches 89.99% with no insurance is an exception above that line. A limited cash-out removes it only if the new loan lands at 80% or less. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Can I take out more than 80% of my home’s value?
On a standard conventional cash-out, no. The ceiling is 80% on a one-unit primary home and 75% on two- to four-unit homes, second homes and investment property. One wholesale lane reaches 89.99% with no mortgage insurance at a 680 score and a 50% ratio on a thirty-year fixed primary residence. It is not written in Texas, and it depends on a full file review.
Do financed closing costs reduce my cash?
Yes. Costs and prepaids you roll into the loan count toward the 80% test, so every point financed is a point less cash. You can reduce that effect by paying costs out of pocket, but that means bringing money to the table.
What if I have a home equity line?
The payoff comes out of your cash, and it can change the loan type. Paying off a line that was not used to buy the home makes a limited cash-out a full cash-out. Ask for the loan type to be confirmed before you plan around the lower-cash lane.
Is cancellation cheaper than refinancing?
Often, if you are close. Cancellation at 80% of the original value or automatic termination at 78% carries no new loan costs. A refinance makes more sense when your value has risen well above the original, you want cash, or you cannot wait for the schedule.
Comparing Your Options
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. Put your payoff, your estimated value and your goal on the table, and the 80% formula tells you quickly whether the cash is worth the cost. A home that appraises a few points higher can turn a thin check into a real one, and the same few points lower can wipe it out.
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.
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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. Fannie Mae Eligibility Matrix
2. Freddie Mac Guide Section 4301.4, “No cash-out” refinance
3. Fannie Mae Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions
4. Consumer Financial Protection Bureau
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 to Eliminate PMI? · How a Conventional Cash-Out Refinance Changes Your Mortgage Payment · How to Qualify and Apply for a Cash-Out Refinance Without Private Mortgage Insurance
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
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.