Cash-Out Refinance Maximum Calculator
Start with an appraised-value scenario and a verified program maximum LTV. Pay off the existing first mortgage and any liens that must close, reserve costs withheld from proceeds, and see both the highest new principal and the maximum net cash that could reach the borrower.
Map the new loan and proceeds
Use a dated payoff, not the last statement principal.
Shown as transaction cost, not deducted from the refinance wire twice.
The proceeds funnel
The order prevents a familiar error: calling all equity above the old principal “cash available.” A homeowner with a $500,000 property and $300,000 mortgage has $200,000 of arithmetic equity, but an 80% LTV ceiling allows only a $400,000 new loan. After another $20,000 lien and $11,000 of financed or withheld costs, the modeled maximum net cash is $69,000.
LTV and CLTV answer different questions
Loan-to-value generally compares the new first mortgage with the property value. Combined loan-to-value adds subordinate financing that will remain after closing, while home-equity combined LTV can use the full credit limit of an open-end line under program rules. A subordinate lien being paid off is part of the new-loan use of proceeds; a lien staying open may instead constrain CLTV.
This calculator assumes the “other liens” input will be paid by the new refinance. It does not retain a separate subordinate balance after closing. If a HELOC or second mortgage will remain, obtain the applicable LTV, CLTV, and HCLTV limits and perform the program’s calculations separately. Subordination approval may also be required.
Worked $500,000 property example
At an entered 80% maximum LTV, a $500,000 value produces a $400,000 theoretical new principal ceiling. The dated first-mortgage payoff is $300,000 and a $20,000 lien must also be paid. Gross equity room after liens is $80,000. Eight thousand dollars of closing charges are financed or withheld and $3,000 is reserved for escrows and other cash holds, leaving a maximum estimated wire of $69,000.
The homeowner wants $50,000 net. Adding $300,000, $20,000, $8,000, $3,000, and $50,000 produces a desired structure of $381,000. Dividing by $500,000 yields 76.2% LTV, which is $19,000 of principal below the entered ceiling. A separately paid $2,000 charge does not increase the loan or reduce the wire in this setup, but it reduces the household’s net economic gain from the transaction.
If the appraisal returns at $470,000, the same 80% ceiling becomes $376,000. The desired $381,000 structure would no longer fit. This is why a pre-appraisal estimate should show sensitivity rather than be treated as guaranteed proceeds.
Program rows that can change the maximum
Conventional conforming
Eligibility matrices distinguish principal residence, second home, investment property, one unit versus multiple units, fixed versus adjustable rate, and other transaction features. Lender overlays may be stricter than the enterprise maximum.
FHA cash-out
HUD reduced the maximum FHA cash-out LTV from 85% to 80% in 2019, but current Handbook requirements, occupancy, seasoning, payment history, appraisal, and mortgage limits still must be satisfied. Do not select 80% without checking the current case.
VA cash-out
Entitlement, guaranty, loan purpose, seasoning, net tangible benefit, fee, occupancy, lender policy, and state rules matter. A theoretical VA percentage does not override an investor or lender maximum.
Portfolio and non-QM
Bank, credit union, debt-service-coverage, and alternative-documentation products set private matrices and pricing. A lower maximum can apply as credit score, loan size, property type, or documentation risk changes.
“No-closing-cost” does not mean no cost
The Consumer Financial Protection Bureau explains that a lender credit can cover charges in exchange for a higher interest rate, or costs can be added to the loan. A higher rate raises payments over time; a higher principal consumes equity and raises interest. Compare Loan Estimates on the same day and request versions with and without lender credits.
The payoff also changes daily because of accrued interest, escrow advances, late charges, and the payoff-valid-through date. New prepaid interest and escrow funding can change with the closing date. The calculator separates an entered withheld amount from cash paid separately so the same fee is not subtracted twice.
Maximum proceeds are not maximum affordability
A larger new principal can restart a long amortization schedule, replace an older low-rate mortgage, and increase total interest even when the monthly payment appears manageable. Compare the new principal-and-interest payment, taxes, insurance, mortgage insurance, association dues, and any debts paid with proceeds. Then compare total dollars through the expected holding period.
If cash pays credit cards or other loans, do not assume the household is automatically safer. The transaction converts unsecured balances into debt secured by the home and can stretch repayment across decades. Closing costs and a higher mortgage rate may exceed the interest saved. A written spending and repayment plan belongs beside the LTV calculation.
Appraisal and property eligibility
The lender determines the value used for underwriting and may require repairs, review comparable sales, apply a lower purchase-history value, or find the property ineligible. Condominiums, manufactured homes, mixed-use properties, unique acreage, leaseholds, and properties listed for sale can receive special treatment. An automated valuation estimate is not a promise that the appraisal will support it.
Run at least three value scenarios: conservative, expected, and optimistic. If the desired cash works only at the highest estimate, budget for a smaller wire or a different transaction. Never pressure an appraiser to target the needed value; provide accurate property facts and permitted comparable information through the lender’s process.
Cash received and interest deductions are separate
Loan proceeds generally are not income because they must be repaid. Mortgage interest deductibility depends on federal rules for acquisition indebtedness, home-equity debt use, qualified residence limits, tracing, itemizing, and the tax year. Using cash to improve the home can differ from using it for personal consumption or investments.
Documents that replace guesswork
Gather the current mortgage statement, formal payoff, subordinate-lien statements, HELOC limit and balance, property tax bill, insurance declarations, association statement, income and asset documents, title information, and the lender’s eligibility matrix. After application, use the Loan Estimate to replace generic cost inputs. Near closing, reconcile the Closing Disclosure and updated payoffs.
Confirm whether the desired figure means gross cash-out under the program definition, cash available before costs, or the wire to the borrower. Those are not interchangeable. Ask how the lender treats paid-off debts, delayed financing, recent property listing, ownership seasoning, and cash received by a co-borrower.
Frequently asked questions
Is maximum cash simply value minus mortgage balance?
No. The program’s LTV or combined-LTV ceiling limits the new loan, and liens, financed costs, escrow funding, interest, and other withheld amounts reduce net proceeds.
Should I use my mortgage statement balance?
Use a formal payoff for final planning. A statement balance can omit daily interest, fees, escrow advances, and the amount required through the intended closing date.
Does 80% LTV apply to every cash-out refinance?
No. Eighty percent is only the example. Program, occupancy, units, property, credit, loan size, seasoning, and lender overlays can produce another maximum.
Do costs paid in cash reduce the borrower wire?
Not when truly paid from separate funds. They reduce household economics but should not be deducted from the loan proceeds a second time. Verify the Closing Disclosure source and use of funds.
Is taking the maximum a good idea?
Not necessarily. Compare rate, payment, total interest, loss of equity, purpose of funds, emergency reserves, time in the home, and alternatives. The ceiling is not an affordability recommendation.
Loan limitation: This calculator performs LTV and proceeds arithmetic from user-entered rules. It does not determine value, program eligibility, maximum leverage, liens, costs, underwriting, disclosures, tax treatment, or approval.
FHA borrowers who do not need cash back can compare this scenario with an FHA streamline refinance estimate, which follows a different purpose and eligibility path.