Cash-out refinance cost. Refinancing a low rate to take cash out reprices the entire balance at the new rate, which is why the cash can cost far more than its face value in extra interest.
Also called: cash out refi calculator, home equity cash out.
$358,750.00 new loan for 60,000 of cash, at 68.99% loan to value. Payment goes from $1,692.72 to $2,326.85, and total interest from $156,878.03 to $478,914.44. The cash effectively costs $322,036.41 in extra interest. The new loan is within the 80% limit.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.
The new loan repays the existing balance, funds the cash and absorbs the closing costs. The cost people miss is that the whole balance reprices: taking 60,000 out of a 290,000 loan at 4.25 percent means the other 290,000 now also pays the new higher rate. On a large rate gap the extra interest on the existing balance can dwarf the interest on the cash itself, which is why a home equity line, which leaves the first mortgage alone, is often cheaper.
the new loan repays the old balance, funds the cash and absorbs the closing costsEach of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.
New loan amount$358,750.00
350,000 x 2.5%; 520,000 x 0.8 less 290,000
Open this exampleNew loan amount$297,250.00
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Open this exampleFormula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator