Home equity guide
Cash-out refinance: uses, costs, and alternatives
A cash-out refinance replaces your mortgage with a larger new mortgage and provides part of the difference in cash at closing. It can simplify borrowing into one payment, but it also changes the loan secured by your home.
Reviewed by Equity Flow Group lending operations · Updated August 24, 2026
How does a cash-out refinance work?
The new loan first pays off the current mortgage. After eligible costs and required reserves are accounted for, the approved cash-out amount is delivered at closing. Available proceeds depend on verified value, existing liens, program limits, credit, income, and other underwriting factors.
Estimate a starting equity range; the calculator is informational and is not an appraisal or underwriting result.
What should you compare?
- The rate and payment on the entire new mortgage—not only the cash received.
- Closing costs and how they are paid.
- Whether the payoff date becomes later.
- The cost and risk of moving unsecured balances into an obligation secured by your home.
- Alternatives that preserve the existing first-mortgage terms.
Cash-out refinance versus other equity products
A home equity loan or HELOC usually sits alongside the first mortgage instead of replacing it. That can preserve an existing first-mortgage rate, but creates a separate payment and its own terms. See the full home equity product comparison.
Independent consumer guidance
The CFPB explains that using home equity can move other balances onto the home and increase foreclosure risk if payments become unsustainable. Review its mortgage resources and compare formal Loan Estimates before deciding.