Cash-Out Refinance Tap equity. Keep the mortgage.
Access home equity for renovation, debt consolidation, tuition, or whatever the next chapter needs.
A cash-out refinance replaces your mortgage with a larger one and gives you the difference in cash. Because it's secured by your home, the rate is usually far lower than unsecured debt — a common way to fund renovations, consolidate higher-rate balances, or cover a major expense. Most conventional cash-out refinances let you borrow up to 80% of your home's value.
Tap your home equity by refinancing for more than you owe.
A cash-out refinance replaces your existing mortgage with a larger one and gives you the difference in cash at closing. It's the same as any refinance — new appraisal, new underwriting, new closing — except the new loan amount exceeds the payoff of the old loan.
The cash you receive is yours to use however you want. Common uses: debt consolidation, home improvements, education, business capital, or investment.
An example
Say you have a $200,000 balance on a home worth $400,000. You qualify to refinance up to 80% loan-to-value, or $320,000. The new loan pays off the $200,000 you owe and gives you $120,000 in cash, minus closing costs.
When cash-out makes sense
- Consolidating high-interest debt. Mortgage rates are usually meaningfully lower than credit-card or personal-loan rates. Rolling that debt into a refinance can dramatically lower your monthly debt service.
- Renovations that increase home value. Kitchens, bathrooms, additions — improvements that meaningfully raise market value can make sense to finance against the home itself.
- Investing in a second property. Using equity from a primary residence to fund a down payment on a rental or vacation home.
- Major one-time expenses. Education, medical bills, business capital — anywhere the rate spread makes a cash-out cheaper than alternative borrowing.
What to weigh
- You'll owe more on the home. A larger balance means you've extended your debt and likely your payoff timeline.
- Closing costs apply. Typically 2–5% of the new loan amount.
- Equity required. Most lenders cap cash-out at 80% loan-to-value (some VA loans go higher).
- The rate may be slightly higher than a rate-and-term refinance because of the additional risk.
How it works
- Available on conventional, FHA, VA, and jumbo loans.
- New appraisal determines current home value.
- 80% loan-to-value cap on most programs (VA can go to 100% in some scenarios).
- New 30- or 15-year amortization on the full balance.
Considering using your equity? Reach out — we'll model the new payment, the cash you'd receive, and the all-in cost so you can decide with the math in front of you.
Get started today!
Tell us a little about your situation and we'll send personalized loan options within one business day.
Cash-out refinance vs. HELOC
A cash-out refinance replaces your first mortgage with a larger one and gives you the difference as a lump sum, usually at a fixed rate. A HELOC leaves your first mortgage untouched and adds a second lien you draw from as needed, usually at a variable rate.
| Feature | Cash-Out Refinance | HELOC |
|---|---|---|
| Loan structure | Replaces your first mortgage with a larger one | Second lien on top of your existing mortgage |
| Rate type | Typically fixed | Typically variable |
| Access to funds | Lump sum at closing | Draw as needed during the draw period |
| Effect on first mortgage | Resets it — new rate and term | Leaves it (and its rate) untouched |
| Closing costs | Higher — it's a full refinance | Lower |
| Best for | Consolidating into one fixed payment when today's rate works for your whole balance | Flexible access while keeping a low first-mortgage rate |
Cash-Out Refinance FAQs
How much equity can I cash out?
Most conventional cash-out refinances cap out at 80% loan-to-value. VA cash-out can go up to 100% LTV in some cases. FHA cash-out caps at 80% LTV.
Is the cash taxable?
Generally no — cash-out proceeds are loan proceeds, not income. Interest may be deductible if used for home improvements (consult your tax advisor).
Cash-out refinance vs HELOC — which is better?
Cash-out refinances replace your existing first mortgage with a larger one, locking in a single fixed rate. HELOCs are second liens with variable rates that let you draw and repay as needed. We'll compare both for your scenario.