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Cash-Out Refinance Calculator

While it’s nice to be able to tap your home equity to pay for other expenses, it can be costly too, especially if you already have a low-rate mortgage.

If you’re looking to pull cash out of your home, you’re going to want to know what it will cost you.

My cash-out refinance calculator can quickly determine these costs so you can decide if it makes sense to exchange your existing mortgage for a new, larger one.

Yes, the cash out is added to your existing loan balance, making it larger and potentially a lot more expensive!

Those with low-rate fixed mortgages from the past few years might be better-served hanging onto them, even if they have other high-interest rate debt that requires attention.

I’ve noticed lately that some loan originators are pushing for a cash-out refinance to pay off other debt, even if it results in the homeowner losing their 2-3% 30-year fixed in the process.

That’s an awfully valuable thing to give up, even if you have high-cost debt you want to tackle, especially if you’re restarting the clock on your loan term (e.g. adding another 30 years) at a higher rate!

Give my cash-out refinance calculator a go to see what I mean.

Cash-Out Refinance Calculator

See how a cash-out refinance affects your monthly payment, total interest paid, and the true cost of the cash you receive compared to keeping your current mortgage.

Results update automatically as you type — no submit button needed.

Current loan details

$
%
Current balance
—
Current payment
—
Remaining term
—
Interest remaining
—

Cash-out refinance details

$
Amount you want to receive at closing
%
$
Rolled into loan or paid upfront

Results

New monthly payment
—
Principal + interest
Payment change
—
vs. current payment
Total interest (new loan)
—
Over full new term
True cost of cash
—
Extra interest vs. original

Side-by-side comparison

Keep current mortgage
Current balance—
Interest rate—
Remaining term—
Monthly payment—
Interest remaining—
Total cost (remaining)—
Cash received$0
Cash-out refinance
New loan amount—
New interest rate—
New term—
Monthly payment—
Total interest—
Total cost—
Cash received—
Closing costs
—
Monthly payment savings
—
Break-even
—
What is the “true cost of cash”? A cash-out refinance replaces your existing mortgage with a larger loan at the current market rates. The true cost of the cash you receive is not just the interest on the extra amount, but the difference between the total interest you will pay on the new loan versus what you would have paid keeping your existing mortgage. This is often significantly more than borrowers expect, especially when refinancing into a higher rate or restarting the clock on a new 30-year fixed.

Alternative: second mortgage — optional comparison

Instead of refinancing, a second mortgage allows you to borrow only what you need without touching your existing loan. Enter the loan details below to compare combined costs side by side.

$
Should match your cash-out amount above for a fair comparison
%
Cash-out refinance
New loan amount—
Monthly payment—
Total interest—
Total cost—
Cash received—
Keep 1st + second mortgage
1st mortgage payment—
2nd mortgage payment—
Combined monthly payment—
Total interest (both loans)—
Total cost (both loans)—
Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, legal, or tax advice. Results are estimates based on fixed interest rates and standard amortization and may not reflect actual loan terms, fees, prepayment penalties, or tax implications. Please consult a licensed mortgage or financial professional before making any financial decisions.

A Cash-Out Refinance Is Most Beneficial When Mortgage Rates Are Lower Than Your Current Rate

When interest rates are lower than your current rate, it can make sense to pull cash out and extinguish the original loan in one shot.

[Searching for a home loan? See your options with dozens of lenders fast.]

For example, say you’ve got a 30-year fixed with an interest rate of 7% and you can get a new loan set at 5.5%, while also pulling out some cash.

This could be a win-win, where you snag a lower interest rate and get the cash you need to pay off more expensive debt or simply to use toward other expenses.

Conversely, during times (such as now) when a lot of existing homeowners have very low mortgage rates that are well below prevailing market rates, it might be better to leave the mortgage intact.

When a Second Mortgage Makes More Sense

If you have a low rate but still need cash, it might be possible to apply for a second mortgage instead, which preserves the first mortgage, its low rate, and the remaining loan term.

You can take out a HELOC or a home equity loan behind your first mortgage, get the cash you need, and potentially obtain a lower combined payment and total interest expense.

It’s still possible to pay off that debt, and a second mortgage might be the better call.

That way you can keep your low-rate first mortgage intact and also stay on schedule for an eventual payoff.

This arrangement also keeps the cash out separate from your original home purchase loan instead of commingling it.

That’s one of the problems with a cash-out refinance. If you only need a little bit of cash, refinancing your entire first mortgage could prove quite costly, as seen in the “true cost of cash” calculation above.

It compares the remaining interest due to on the original loan to the total interest on the refinance loan to give you an idea of what it actually costs to obtain the cash desired.

Do the math with my cash-out refinance calculator before you proceed to determine which scenario is best for your situation.

The one caveat I'll point out is it depends how long you'll actually keep your loan(s). These calculation always assume the loan(s) will be kept until maturity.

Colin Robertson
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