Follow the replacement loan from principal to cash
A cash-out refinance replaces existing debt with a new loan. Some of the new principal pays off the debt being replaced; closing costs use another portion. Only the amount left after both deductions is available as cash. The CFPB describes this replacement-loan structure and notes that closing costs and the new interest rate affect its cost. See its explanation of cash-out refinancing.
The Cash-Out Refinance Calculator starts with the whole proposed new loan amount that you enter. It estimates cash and payments for one US/USD property and one fixed-rate replacement loan. It does not choose a loan amount, determine qualification or decide whether refinancing is beneficial. The lender may assess a different value or impose requirements outside this model.
Enter a payoff quote, not the original principal
Existing debt payoff means the amount needed to discharge the debt being replaced. Include any interest or charges already included in that payoff quote. The CFPB explains that a payoff amount can differ from the current balance because it can include interest through the payoff date and unpaid charges. A statement balance alone may therefore understate the deduction.
The calculator accepts one aggregate payoff. It does not estimate payoff from the original loan size, elapsed years or an acquisition loan saved elsewhere. Check which debt the entered quote covers and the date for which it applies. If the payoff is zero, no existing debt is being paid off in the modeled scenario. That is supported arithmetic, without asserting that a lender would classify or offer the transaction as a cash-out refinance.
Keep principal, costs and net proceeds separate
Use one aggregate refinance closing-cost amount, excluding anything already included in payoff. All entered costs are deducted from the proposed principal. If the proposed loan is $300,000 and costs are $6,000, the calculator does not increase the principal to $306,000. The debt stays $300,000; the costs reduce cash left over.
There is no automatic points calculation, lender-credit adjustment, escrow-refund estimate, prepaid-item reconciliation or cash-paid-versus-financed switch. Include applicable costs once in the aggregate estimate. The Closing Costs calculator models acquisition or sale costs separately; its acquisition estimate is not automatically a refinance-cost estimate.
The visible reconciliation is:
- Proceeds after payoff, before costs = proposed principal − existing debt payoff.
- Signed net cash = proposed principal − existing debt payoff − refinance costs.
- Positive net cash is estimated cash available. Zero means no cash released after the entered deductions.
- Negative net cash is a funding shortfall. Additional cash required shows its positive magnitude, while the signed reconciliation stays negative.
Cash released is borrowed money. It creates cash alongside a repayment obligation; it is not profit, rental income or investment return. Spending the cash does not reduce the principal owed.
The new payment covers the whole new loan
The new monthly principal-and-interest payment applies to the entire replacement principal, including the portion that retires the old debt. It is not the payment on the cash released alone. Payoff and closing-cost edits change cash available but do not change the scheduled payment when principal, rate and term stay fixed.
The term is both contractual maturity and amortization, from 1 to 600 whole months. Payments occur monthly in arrears, beginning one month after origination, with no interest-only period or balloon. The annual rate stays fixed. At a zero rate, payment is principal divided by the number of months and scheduled interest is exactly zero.
For a positive rate, the model uses the standard amortizing-payment formula. As the CFPB's mortgage amortization explanation describes, the interest and principal portions change as the balance declines even when combined principal and interest stay level. Taxes, insurance and property expenses are outside this calculator's payment. The Mortgage calculator offers a separate standard payment analysis; it retains its existing acquisition-loan mapping.
Holding principal and a positive rate constant, a longer term lowers the monthly payment but increases total scheduled interest. A shorter term requires larger payments and reduces the time interest accrues. Neither observation establishes savings against an existing loan: this model has no old-rate, remaining-term or comparison input. Its rate sensitivity reruns the engine at −1, −0.5, 0, +0.5 and +1 percentage points with every other input fixed. Unsupported rates outside 0–100%, or scenarios exceeding safe output precision, are omitted. These are scenarios, not forecasts or recommended rates.
LTV, equity and funding shortfalls
New-loan LTV is proposed principal divided by current property value. Modeled equity after refinance is current value minus that principal. A $300,000 new loan against $400,000 of value gives 75.00% LTV and $100,000 of modeled equity. Neither figure subtracts payoff a second time: the replacement principal is the modeled debt after the old debt is discharged.
Equity assumes the modeled new loan is the only remaining property debt. Other retained liens are outside scope, so the result is not a complete equity estimate when those liens remain. It is also not sale proceeds, profit or total net worth. The LTV calculator lets you inspect its separate value-basis assumptions. The Maximum Loan calculator uses separate sizing inputs; this cash-out estimate has no maximum-LTV target or eligibility rule.
Principal equal to value gives 100% LTV and zero modeled equity. Principal above value gives LTV above 100% and negative equity, with a warning that the numerical result does not imply financing is available. Likewise, payoff or costs above proceeds are allowed: they reveal additional cash required instead of hiding the shortfall or labeling it cash received.
Worked examples
The standard example uses $400,000 current value, $300,000 new principal, $200,000 payoff, $6,000 costs, a 6.50% annual rate and 360 months. The two zero-rate examples use $200,000 value, $120,000 principal, $3,000 costs and 120 months. Their payoff amounts are $90,000 and $119,000 respectively.
| Result | Standard | Zero rate | Shortfall |
|---|---|---|---|
| New principal | $300,000.00 | $120,000.00 | $120,000.00 |
| Less: payoff | $200,000.00 | $90,000.00 | $119,000.00 |
| Proceeds before costs | $100,000.00 | $30,000.00 | $1,000.00 |
| Less: costs | $6,000.00 | $3,000.00 | $3,000.00 |
| Signed net cash | $94,000.00 | $27,000.00 | −$2,000.00 |
| Cash available | $94,000.00 | $27,000.00 | $0.00 |
| Additional cash required | $0.00 | $0.00 | $2,000.00 |
| New-loan LTV | 75.00% | 60.00% | 60.00% |
| Modeled equity | $100,000.00 | $80,000.00 | $80,000.00 |
| Monthly P&I | $1,896.20 | $1,000.00 | $1,000.00 |
| Total scheduled payments | $682,633.47 | $120,000.00 | $120,000.00 |
| Total scheduled interest | $382,633.47 | $0.00 | $0.00 |
In the shortfall example, $1,000 remains after payoff but costs are $3,000. The resulting −$2,000 net cash means $2,000 must be supplied separately. The payment remains $1,000 because the proposed principal, rate and term have not changed. If payoff were $117,000 instead, the same $3,000 costs would leave exactly zero cash. With zero payoff and zero costs, the full entered principal would be cash available.
Precision and what your workspace preserves
Formula version cash-out-refinance@1.0.0 keeps intermediate Decimal calculations unrounded, then rounds money half-up to cents. LTV displays to two decimal percentage places. Scheduled totals use the unrounded payment: $1,896.20 × 360 is not the authoritative total because the displayed payment has already been rounded. The methodology records formulas, units, conventions, exclusions and the reviewed version.
All six inputs are required. Value and principal must be positive; payoff and costs may be zero. Money uses cent precision, the annual rate uses whole basis points from 0–100%, and the term uses whole months. Blank, nonfinite, negative, overprecise and unsafe inputs or derived money totals are rejected rather than silently rounded or clamped. Raw text is checked before number conversion can hide extra decimals.
The local workspace shares current market value, never inferring it from purchase price or ARV. Principal, rate and term use the distinct refinance loan role. Only payoff and aggregate refinance costs live in this calculator's version-1 extension. Payoff is never inferred from another role's original principal. Acquisition closing costs and the narrower stored refinance fixed fees or points remain separate; any populated unsupported fee terms are explained, and your aggregate input governs this estimate.
Each compatible field loads independently. Defaults fill only absent fields and stay unsaved until a valid action. A stored zero is not missing. When term is absent, stored amortization can supply it. Differing stored term and amortization values remain visible as a conflict; only an explicit term edit synchronizes those two fields. Unsupported interest-only and early or conflicting balloon terms are explained and retained. Rate, payoff and cost edits do not repair those conflicts or remove unrelated terms.
Mortgage, Rental ROI, Commercial Loan, DSCR, Debt Yield, LTV and Maximum Loan retain their established roles. They do not silently switch to this refinance loan, add it to acquisition debt or count cash-out proceeds as income or investment return. Shared current-value edits can still affect calculators that use that field.
Opening or navigating does not save. Valid edits and Use example follow the existing local-save behavior; invalid edits preserve the last valid state. Share links and browser reports carry the six resolved inputs as isolated unsaved previews and leave a recipient's saved scenario untouched. Reports recalculate the same version and print in the browser. Input-only export, reset and memory-only operation remain available under their existing controls; previews cannot export or reset the saved scenario.
Use the estimate within its limits
The model describes one fixed-rate, fully amortizing replacement loan with all scheduled payments made on time. It excludes retained liens, HELOCs, variable rates, draws, extra payments, tax consequences and lender-specific qualification. It does not compare offers, estimate savings or choose how to use borrowed cash. The CFPB sources above support the general payoff, replacement-loan and amortization concepts; they are not presented as universal requirements for investor loans.
Maintained by the project owner / Cloudwards e.K. Sources and calculation conventions reviewed October 12, 2026.