Cash-Out Refinance Formula Explained
The Cash-Out Refinance formula explained in plain English: the equation behind the Cash-Out Refinance Calculator, its variables, and the assumptions it makes.
By Onias Derilus, Mortgage Capital · NMLS# 1859012 · Last Updated: June 2026
It estimates how much cash you can pull from your home's equity in a cash-out refinance. You also see your new loan amount and monthly payment.
The Cash-Out Refinance Formula, Explained
Cash out = (value × max LTV) − existing balance − closing costs
Most cash-out refinances on a primary residence cap the new loan at 80% of the home's value, so your accessible cash is the difference between that ceiling and what you still owe.
Because you are refinancing the entire balance, the new rate applies to the full loan, not just the cash withdrawn. The calculator shows the new payment so you can weigh the cash against the higher monthly cost.
The formula is only the starting point. Open the cash-out refinance calculator to plug in your own numbers and see the result instantly. For a rate tied to your actual file, talk to a licensed broker before you decide.
Turn Your Cash-Out Refinance Estimate Into a Real Pre-Approval
Get a personalized rate quote from a licensed Florida mortgage broker — no obligation. NMLS# 1859012.
Rates are illustrative only. APR and payments vary by credit score, loan amount, and market conditions. Subject to credit approval. Not a commitment to lend. NMLS# 1859012. Equal Housing Lender.