Cash-out refinance calculator.

Cash-out refinance rules that decide whether you qualify

Source: Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions, page effective date 12/10/2025. These are conventional (Fannie Mae) rules; FHA, VA, USDA and individual lenders add their own limits.

• Six months on title. At least one borrower must have been on title for at least six months before the new loan is disbursed, with exceptions for inheritance, legal awards, delayed financing, LLC transfers and revocable trusts.
• Twelve-month-old mortgage. If an existing first mortgage is paid off, it must be at least 12 months old by note date.
• Delayed financing. A borrower who bought with cash within the last six months may still take cash out if the purchase was arm's length, the settlement documents confirm no mortgage financing was used, there are no liens, the funds are documented, and the new loan does not exceed the documented initial investment plus closing costs.
• Maximum LTV. The limit depends on occupancy, units, credit score and loan type, and is set in Fannie Mae's Eligibility Matrix, which this page does not reproduce. Enter the limit your lender quotes.

Worked example (fictional)

Home worth $500,000, 80% max LTV gives a $400,000 new loan. Payoff $250,000 at 3.5% with 25 years left, closing costs $8,000 and 0.5 point ($2,000): cash out is $400,000 − $250,000 − $10,000 = $140,000. At 6.5% over 30 years the new principal-and-interest payment is about $2,528, up from $1,252. Keeping the 3.5% mortgage and borrowing $140,000 on a HELOC at 8.5% over 20 years costs about $2,467 a month combined, and over seven years the two-loan route costs roughly $51,500 less in interest and fees in this example. Low existing rates are why the HELOC route often wins; a higher existing rate can reverse it. Use the form to test your own figures.

How each figure is calculated

Payment: P&I = principal × r ÷ (1 − (1 + r)⁻ⁿ), r = annual rate ÷ 12, n = months. Blended rate: (payoff × current rate + HELOC amount × HELOC rate) ÷ (payoff + HELOC amount), compared against your new rate. Total interest over the horizon: month-by-month amortization of each loan for the years entered; the cash-out refinance also carries its closing costs and points, the HELOC route its HELOC closing costs. Months to recoup: upfront costs ÷ monthly payment saving, shown only when the new payment is lower than the alternative. The HELOC is modeled as a fixed-rate loan repaid over the years entered; real HELOCs have variable rates and draw periods.

This is a planning estimate, not a loan offer or advice. It excludes mortgage insurance, prepayment penalties, rate changes, tax effects and lender-specific fees. Confirm terms with your Loan Estimate.