Cash-Out Refinance Calculator
See cash available, new payment, monthly delta, and break-even on closing costs.
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Sam's Take
Cash-out refis at current rates (mid-7s) only make sense if you have a real use for the capital — another property purchase with returns higher than the new rate, or paying off higher-interest debt. Refinancing a 4% loan into a 7.5% loan to pull cash and stick it in the stock market is usually a losing trade. The other big trap: the new 30-year clock resets, so you're paying interest for longer. Run the cash flow on the new loan vs the old before you sign anything.
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What a cash-out refinance actually is
A cash-out refinance is when you replace your existing mortgage with a new, larger one — and you walk away with the difference in cash. If your house is worth $500K and your current mortgage balance is $200K, you have $300K of equity. A cash-out refi at 75% LTV means a new loan of $375K. After paying off the old $200K loan, you keep $175K (minus closing costs). It's a way to access equity without selling the property.
In 2026 with rates in the mid-7s for investment properties, this math is much harder than it was in the 3-4% rate era. The right question isn't "can I refinance?" — it's "is the cost of this new money worth what I'm going to do with it?"
The constraints you have to meet
- LTV limits. On a primary residence, conventional cash-out caps at 80% LTV (so on a $500K house, max loan is $400K). Investment properties cap at 75%, sometimes 70%. Commercial properties cap at 65-70%. The lower LTV is part of the bank's risk control — they want a real equity cushion in case you stop paying.
- Seasoning. Most lenders won't let you cash-out refi a property you bought less than 6-12 months ago. They want some history on the property and some skin in the game from you before they'll let you pull capital out.
- DSCR (for investment properties). The new, larger payment still has to clear the lender's DSCR threshold. So if you cash out, the bigger mortgage shrinks the cushion between rent and mortgage. If that drops you below DSCR 1.25, the loan won't fund.
- Closing costs. Typically 2-3% of the new loan amount. On a $375K refi that's $7,500-11,000. You can roll it into the loan or pay out of pocket — either way it's real money.
The break-even logic
If your new rate is lower than your old rate, you have a clean break-even calculation. Closing costs divided by monthly interest savings tells you how many months until you've paid back the cost of the refi. Beyond that point you're saving real money every month for the rest of the loan.
But here's where 2026 is different: most landlords sitting on 3-4% mortgages from 2020-2022 are looking at refi rates of 7-8%. Your new rate is higher than your old rate, so there's no break-even on the rate itself. The only justification for the refi is the cash itself — what you're going to do with it. That changes the question from "should I refi?" to "is the deal I'm pursuing with this cash going to return more than the difference in interest cost?"
For most buy-and-hold landlords today, the answer is no. For someone with a specific opportunity — another deal that pencils, a debt at 18% to consolidate, a major income-producing renovation — it can still work. Run the numbers. Don't refinance because you can. Refinance because the next dollar does more work outside the property than it does sitting as equity inside it.