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Estimate gross cash out, the new monthly mortgage payment and rental cash flow before income tax.
Cash out before closing costs
$100,000Target loan less existing balanceTarget borrowing of $300,000 exceeds or equals the entered existing balance before closing costs.
New monthly payment
$2,077.14New monthly cash flow
$322.86Example: illustrative 30-year term, $3,000 rent and $600 operating costs.
Rates as of
A cash-out refinance replaces existing borrowing with a new loan and may release some equity. This calculator first estimates the target loan from your property value and loan-to-value percentage, then subtracts the existing loan balance. The difference is shown before closing costs, additional secured debts and any adjustment to the final payoff figure.
Property value should reflect the current property rather than an old purchase price; the lender may obtain its own appraisal and use a different figure. The existing loan field is the outstanding balance you want the refinance to repay. A payoff statement can include interest or charges beyond the principal shown on a regular account statement.
Loan-to-value, or LTV, means borrowing divided by property value. Enter the target percentage for your scenario; it is not a statement that a lender allows that percentage. The rate starts at the Freddie Mac 30-year survey average, labeled as a typical value.
A property valued at $400,000 with a target LTV of 75% produces a target loan of $300,000. Subtracting an existing balance of $200,000 gives $100,000 of cash out before closing costs.
At the typical survey rate of 7.40% and an illustrative 30-year term, the $300,000 repayment loan costs $2,077.14 a month. With illustrative rent of $3,000 and operating costs of $600, the estimated monthly cash flow is $322.86 before income tax. In the formula, P is the new loan, r is the annual rate divided by 12 and n is the term in years times 12.
The cash-out difference is useful, but it does not show the cash you actually receive at closing. Closing costs are not one of the specified inputs, so the result says they have not been deducted rather than treating them as zero. Any other secured debts are not deducted either. If the difference is negative, the new target loan would not repay the existing balance even before those charges.
The new monthly payment assumes a fully amortizing repayment loan with monthly compounding and a constant nominal rate over your term. Zero interest divides the loan over its monthly payments, and zero target borrowing gives a zero payment. Interest-only, balloon, adjustable-rate and fee-financed loans are outside this payment model.
New monthly cash flow uses the rent you expect to collect after any vacancy allowance, less operating costs and the new payment. Convert annual tax and insurance bills to monthly amounts and enter each expense once, because the principal-and-interest payment is already deducted. The result is a cash flow estimate before income tax, not taxable rental profit or a lender's affordability decision.
Freddie Mac's weekly survey averages 30-year fixed rates on conventional, conforming home purchase loans for owner-occupied one-unit homes with good or excellent credit. A rental-property cash-out refinance is usually priced differently, so treat the pre-filled rate as a typical starting point with its checked date and replace it with a lender's offer.
Changing the rate or term changes the payment and cash flow but not the gross borrowing difference implied by the value and LTV.
Ask the lender to confirm the approved valuation, maximum borrowing, payoff amount, term, rate and all closing costs. Compare the total repayment obligation as well as the cash released: a longer term lowers the monthly payment but usually raises the total interest paid.
Before relying on the released funds, ask an accountant about interest deductibility and how the use of proceeds affects tax treatment. This calculator is a preliminary borrowing and cash flow estimate; it does not approve a loan or certify that the property will earn enough to service it.
The calculator multiplies property value by your target loan-to-value percentage, then subtracts the existing balance. This is before closing costs and any other secured debt, so it is an estimate, not the amount you will necessarily receive.
The target loan is repaid through equal monthly principal-and-interest payments at your entered rate and term. A zero rate divides the loan over the number of monthly payments. The term field starts empty because only your loan terms can supply it.
Expected monthly rent less monthly operating costs and the new principal-and-interest payment. Put property tax, insurance, maintenance, management and other running costs in the operating-cost field, excluding the mortgage payment.
No. It is your scenario input. A lender must confirm its permitted borrowing, valuation and eligibility rules for the specific property and loan.
The target loan is smaller than the balance entered. You would need to cover that difference to repay the existing balance, in addition to any closing costs. The calculator shows the negative amount instead of hiding it.
