💰 Cash-Out Refinance Calculator
Unlock your home’s equity. See your options instantly.
The Core Formula
This calculator primarily uses the standard loan amortization formula to determine your monthly payments:
M = P [r(1+r)ⁿ] / [(1+r)ⁿ – 1]
M = Monthly Payment
P = Principal Loan Amount
r = Monthly Interest Rate
n = Number of Months
Current Situation
New Refinance Loan
Your Refinance Summary
Cash You’ll Receive
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New Monthly Payment
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Change in Payment
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New Loan to Value (LTV)
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Most lenders prefer an LTV of 80% or less.
Understanding the Formula
The calculation for your new monthly mortgage payment is based on this fundamental financial formula:
M = P [r(1+r)ⁿ] / [(1+r)ⁿ – 1]
This formula ensures that each fixed monthly payment correctly allocates funds towards both the interest accrued for that month and the reduction of the principal loan balance, guaranteeing the loan is fully paid off by the end of the term.
1. About This Tool
A cash-out refinance is a powerful financial move that replaces your existing mortgage with a new, larger loan, allowing you to withdraw the difference in cash. This calculator is designed to be your comprehensive guide through this process. It goes beyond simple payment calculations to provide a full, clear picture of how a cash-out refinance will impact your finances both now and in the long term. By inputting your current mortgage details and your desired refinance terms, you can instantly see not just your new monthly payment, but also how it compares to your old one. The tool helps you understand the immediate benefit—the tax-free cash you receive—while also clarifying the long-term costs, such as the total interest paid over the life of the new loan compared to your old one. We’ve built this tool for homeowners who want to make informed decisions. Whether you’re planning a home renovation, consolidating high-interest debt, or funding a major life event, this calculator provides the transparency you need to weigh the pros and cons and choose the path that aligns with your financial goals. The interactive charts and detailed amortization schedule empower you to visualize your financial future with confidence.
2. How to Use
Enter Current Situation: Start by providing your home’s current estimated market value and the remaining balance on your existing mortgage. Add your current interest rate to allow for accurate comparisons.
Define New Loan Terms: Input the amount of cash you wish to take out. Then, specify the new interest rate you expect to get and select a new loan term from the dropdown menu. Don’t forget to include estimated closing costs.
Calculate & Review: Click the “Calculate” button. The summary will instantly populate with your key results: the cash you’ll receive, your new monthly payment, and how that payment changes from your current one.
Explore Visuals: Scroll down to the visual dashboard. The charts provide a deep dive into your new loan’s composition, a comparison of loan balances over time, and a breakdown of payment and interest differences. The detailed amortization table shows your loan repayment month by month.
3. Key Features (Our Unique Selling Points)
Comprehensive Visual Dashboard
Go beyond numbers with four distinct, interactive charts. Visualize your new loan’s breakdown, compare old vs. new loan balances over time, and see differences in payments and total interest at a glance.
Side-by-Side Comparison
Our tool doesn’t just calculate your new payment—it explicitly compares it to an estimation of your old payment, helping you immediately understand the monthly impact of your decision.
Full Amortization Schedule
Get a complete month-by-month breakdown of your new loan. See exactly how much of each payment goes toward principal versus interest over the entire life of the loan.
Loan-to-Value (LTV) Insight
We automatically calculate your new LTV, a critical metric for lenders. This helps you understand if your desired cash-out amount is realistic and within typical lending guidelines.
4. Why Use Our Calculator?
Choosing to refinance is a significant financial decision, and clarity is paramount. Our calculator was built to replace confusion with confidence. While other tools might give you a single number, we provide a holistic view. By juxtaposing your old and new loan scenarios through intuitive charts and direct comparisons, we make complex information easy to digest. You can see the long-term consequences of taking cash out now, such as the total interest you’ll pay, helping you make a decision that’s not just good for today, but smart for your future. The fully responsive design ensures you can plan on any device, anywhere. We believe in empowering homeowners with free, high-quality, and transparent financial tools. This calculator is a testament to that commitment, giving you the detailed insights you need to strategically leverage your home equity.
5. Frequently Asked Questions (FAQs)
What is a cash-out refinance?
A cash-out refinance is a type of mortgage refinance where you take out a new home loan for more than you currently owe. The difference is paid to you in cash. It’s a way to tap into the equity you’ve built in your home.
Is the cash I receive taxable?
Generally, no. The cash you receive from a cash-out refinance is considered new debt, not income. Therefore, it is typically not subject to income tax. However, it’s always a good idea to consult with a tax advisor for your specific situation.
What is Loan-to-Value (LTV) and why is it important?
Loan-to-Value (LTV) is the ratio of your loan amount to the appraised value of your property, expressed as a percentage. Lenders use it to assess risk. For most cash-out refinances, lenders require your new LTV to be 80% or lower, meaning you must maintain at least 20% equity in your home after the transaction.
What are common uses for the cash received?
Homeowners use the cash for many purposes, including high-value home renovations, consolidating higher-interest debts (like credit cards or personal loans), paying for education expenses, starting a business, or covering other major life expenses.
Will a cash-out refinance increase my monthly payment?
Not necessarily. Your new payment depends on the new loan amount, interest rate, and term. If you secure a lower interest rate or extend your loan term, your payment could potentially stay the same or even decrease, despite borrowing more money. This calculator will show you the exact impact.