💰 Cash-Out Refinance 2025: Get Up to $87K Cash from Your Home Equity
Cash-out refinance searches surged 64% in 2025 as homeowners tap into $11.5 trillion in home equity. With rates at 6.72% (down from 7.8% in 2023), now might be the perfect time to access your equity. This complete guide shows you exactly how much cash you can get, current rates, requirements, and whether it's worth it for YOUR situation. Compare cash-out refinance rates from top lenders to find the best deal.
🔥 See How Much Cash YOU Can Get
Get personalized cash-out refinance quotes. Compare rates from 50+ lenders. Free, no obligation.
Calculate My Cash-Out Amount →✓ Free quotes ✓ No SSN required ✓ 2-minute application
💡 What Is a Cash-Out Refinance? (2025 Explained)
A cash-out refinance replaces your current mortgage with a larger loan, giving you the difference in cash. You're essentially converting your home equity into liquid cash while refinancing your mortgage. Compare cash-out refinance rates from multiple lenders.
📊 How It Works: Real Example
($320,000 new loan - $250,000 old loan = $70,000 cash, minus $3-5K closing costs). Calculate your cash-out amount instantly.
🆚 Cash-Out vs Regular Refinance vs HELOC
| Feature | Cash-Out Refinance | Regular Refinance | HELOC |
|---|---|---|---|
| Get Cash? | ✓ Yes | ✗ No | ✓ Yes |
| New Loan? | Yes (larger) | Yes (same size) | No (2nd loan) |
| Rate Type | Fixed 6.72% | Fixed 6.5% | Variable 9-11% |
| Closing Costs | 2-5% ($6K-15K) | 2-5% ($6K-15K) | $0-500 |
| Best For | Large lump sum + lower rate | Lower rate only | Ongoing access to cash |
⚠️ Key Difference
Cash-out refinance replaces your mortgage with a new, larger loan. HELOC adds a second loan on top of your existing mortgage. If you want to lower your rate AND get cash, cash-out refinance is usually better.
💵 How Much Cash Can You Get? (Calculator + Examples)
📐 Cash-Out Formula
Maximum Cash = (Home Value × Max LTV%) - Current Mortgage Balance - Closing Costs
LTV = Loan-to-Value ratio. Conventional = 80%, FHA = 80%, VA = 90%, Jumbo = 75%
🏠 Real Cash-Out Examples by Home Value
$300K Home, $150K Owed
Home Value
$300,000
Current Mortgage
$150,000
Max Loan (80% LTV)
$240,000
💰 Cash You Get
$85,000
After $5K closing costs. New monthly payment: ~$1,600 at 6.72% (30-year). Calculate your exact cash amount.
$500K Home, $300K Owed
Home Value
$500,000
Current Mortgage
$300,000
Max Loan (80% LTV)
$400,000
💰 Cash You Get
$92,000
After $8K closing costs. New monthly payment: ~$2,667 at 6.72% (30-year)
$400K Home, $200K Owed (VA Loan)
Home Value
$400,000
Current Mortgage
$200,000
Max Loan (90% LTV - VA)
$360,000
💰 Cash You Get
$153,000
After $7K closing costs. VA loans allow 90% LTV = MORE cash! Rate: 6.45%
📊 Maximum LTV by Loan Type
| Loan Type | Max LTV | Min Credit Score | Best For |
|---|---|---|---|
| Conventional | 80% | 620 | Most borrowers, best rates |
| FHA | 80% | 580 | Lower credit scores |
| VA | 90% | 580-620 | Veterans, MOST cash |
| Jumbo | 75% | 700 | High-value homes $766K+ |
💰 Get Your Exact Cash-Out Amount
See personalized quotes from top lenders. Find out exactly how much cash YOU can get.
Compare Cash-Out Offers →✓ Free quotes ✓ Compare 50+ lenders ✓ No obligation
📈 Cash-Out Refinance Rates October 2025
📅 Updated: October 2, 2025
Cash-out refinance rates dropped 0.5% after the Fed's September rate cut. Current rates are the lowest since May 2023. Experts predict rates will stay in the 6.4-7.0% range through Q4 2025. Lock in today's low rates.
🏦 Current Cash-Out Rates by Loan Type
| Loan Type | 30-Year Rate | 15-Year Rate | Monthly Payment ($300K) |
|---|---|---|---|
| Conventional | 6.72% | 6.15% | $1,938/mo |
| FHA | 6.85% | 6.30% | $1,963/mo |
| VA | 6.45% | 5.95% | $1,886/mo |
| Jumbo | 6.95% | 6.40% | $1,987/mo |
💡 Rate Comparison: Cash-Out vs Regular Refinance
Cash-out refinance rates are typically 0.125-0.375% higher than regular refinance rates because lenders consider them higher risk.
- •Regular refinance: 6.50% (no cash out)
- •Cash-out refinance: 6.72% (with cash)
- •Difference: 0.22% = $44/month on $300K loan. Compare your options.
📊 Rate Factors: What Affects Your Rate?
✅ Lower Your Rate
- • Credit score 740+ → Save 0.5-0.75%
- • LTV under 70% → Save 0.25%
- • DTI under 36% → Better approval
- • Larger loan amount → Better rates
- • Primary residence → Lower rate
❌ Raise Your Rate
- • Credit score under 680 → Add 0.5-1%
- • LTV over 75% → Add 0.25-0.5%
- • DTI over 43% → Add 0.25%
- • Investment property → Add 0.5-1%
- • Cash-out over $100K → Higher rate
✅ Cash-Out Refinance Requirements 2025
1️⃣ Credit Score Requirements
| Loan Type | Minimum Score | Best Rate Score |
|---|---|---|
| Conventional | 620 | 740+ |
| FHA | 580 | 680+ |
| VA | 580-620 | 700+ |
| Jumbo | 700 | 760+ |
2️⃣ Equity Requirements
You must keep at least 20% equity in your home after the cash-out (25% for jumbo, 10% for VA).
Example:
$400K home → Max loan $320K (80% LTV) → Must keep $80K equity (20%)
3️⃣ Debt-to-Income (DTI) Ratio
Your total monthly debt payments (including new mortgage) cannot exceed:
- • Conventional: 43% DTI (50% with compensating factors)
- • FHA: 43% DTI (57% with strong credit)
- • VA: 41% DTI (flexible with residual income)
- • Jumbo: 43% DTI (36% preferred)
💡 DTI Calculation:
(New mortgage + car + credit cards + student loans) ÷ Gross monthly income
Example: $2,500 mortgage + $500 car + $200 cards = $3,200 ÷ $8,000 income = 40% DTI ✓
4️⃣ Occupancy & Seasoning Requirements
- •Waiting period: 6 months minimum since purchase or last refinance
- •Primary residence: Best rates, easiest approval
- •Second home: Higher rates (add 0.25-0.5%)
- •Investment property: Highest rates (add 0.5-1%), stricter requirements
5️⃣ Documentation Needed
Income Verification:
- • 2 years tax returns
- • 2 recent pay stubs
- • W-2s (last 2 years)
- • Bank statements (2 months)
Property & Identity:
- • Home appraisal (ordered by lender)
- • Homeowners insurance
- • Photo ID (driver's license)
- • Current mortgage statement
🤔 Is Cash-Out Refinance Worth It in 2025?
✅ When It's Worth It
- 1.Consolidating high-interest debt: Credit cards at 18-29% → Mortgage at 6.72% = HUGE savings
- 2.Home improvements with ROI: Kitchen remodel (70-80% ROI), bathroom (60-70% ROI), adding bedroom
- 3.Current rate is 7.5%+: Refinancing to 6.72% saves money PLUS you get cash
- 4.Staying 5+ years: Break-even on closing costs, maximize savings
- 5.Investment with higher return: Rental property, business with 10%+ ROI
❌ When It's NOT Worth It
- 1.Current rate under 5%: Don't trade a 4% rate for 6.72% just to get cash
- 2.Moving within 2 years: Won't recoup closing costs ($6K-15K)
- 3.Buying depreciating assets: Cars, boats, vacations = bad debt
- 4.Already struggling with payments: Adding debt makes it worse
- 5.No clear plan for cash: "I'll figure it out later" = recipe for disaster
💰 Real Savings Example: Debt Consolidation
Scenario: $50K Credit Card Debt at 24% APR
❌ Before (Credit Cards)
✅ After (Cash-Out Refi)
💰 TOTAL SAVINGS: $63,720
Plus $1,177/month cash flow improvement!
📊 Break-Even Calculator
How to Calculate Break-Even:
Break-Even Months = Closing Costs ÷ Monthly Savings
Example:
- • Closing costs: $8,000
- • Old payment (7.5%): $2,098/month
- • New payment (6.72%): $1,938/month
- • Monthly savings: $160
- • Break-even: $8,000 ÷ $160 = 50 months (4.2 years)
Rule of thumb: If break-even is under 5 years AND you're staying that long, it's usually worth it.
🏆 Best Cash-Out Refinance Lenders 2025
Based on rates, fees, approval speed, and customer reviews. Always compare 3-5 lenders to get the best deal.
1. Better.com
Best OverallDigital-first lender with lowest rates and fees. Fast approval, excellent for tech-savvy borrowers.
Rate Range
6.50-6.85%
Min Credit
620
Closing Time
21-30 days
- ✓ $0 lender fees
- ✓ Digital application
- ✓ Rate lock 90 days
2. Rocket Mortgage
Fastest ClosingLargest online lender. Excellent customer service, fast closings, great mobile app.
Rate Range
6.65-7.00%
Min Credit
620
Closing Time
21-28 days
- ✓ 24/7 support
- ✓ Verified approval in minutes
- ✓ Excellent mobile app
3. Veterans United (VA Only)
Best for Veterans#1 VA lender. Specializes in VA cash-out refinance. 90% LTV = most cash available.
Rate Range
6.30-6.65%
Min Credit
580
Max LTV
90%
- ✓ VA loan experts
- ✓ No PMI ever
- ✓ Highest cash-out amounts
4. Chase Bank
Best for Existing CustomersRelationship discounts for Chase customers. In-person service, jumbo loan expertise.
Rate Range
6.70-7.10%
Min Credit
680
Closing Time
30-45 days
- ✓ 0.25% rate discount for customers
- ✓ In-person service
- ✓ Jumbo loan expertise
5. LendingTree (Marketplace)
Best for ComparisonCompare multiple lenders at once. Get 5+ quotes in minutes. Great for finding best rate.
Lenders
50+
Min Credit
580
Quote Time
2 minutes
- ✓ Compare 5+ offers
- ✓ No SSN required
- ✓ Free service
💡 Pro Tip: Always Compare
Rates can vary by 0.5-1% between lenders on the same day. On a $300K loan, that's $100-200/month difference. Always get quotes from at least 3 lenders.
⚠️ 10 Common Cash-Out Refinance Mistakes (Avoid These!)
1. Not Shopping Multiple Lenders
Cost: $100-300/month higher payment. Solution: Get 3-5 quotes.
2. Taking Out More Cash Than Needed
Cost: Higher payment, more interest. Solution: Only borrow what you need.
3. Ignoring Closing Costs
Cost: $8K-15K surprise. Solution: Get Loan Estimate upfront.
4. Using Cash for Depreciating Assets
Cost: Paying 30 years for cars/vacations. Solution: Use for appreciating assets only.
5. Not Improving Credit First
Cost: 0.5-1% higher rate. Solution: Wait 3 months to improve score.
🎯 Ready to Get Cash from Your Home Equity?
Compare cash-out refinance offers from 50+ lenders. See how much cash YOU can get.
Get My Cash-Out Quote →✓ Free quotes ✓ No obligation ✓ Compare rates ✓ 2-minute application
❓ Frequently Asked Questions
What is a cash-out refinance and how does it work in 2025?
A cash-out refinance replaces your current mortgage with a larger loan, giving you the difference in cash. Example: $300K home, $200K owed → Refinance for $250K, get $50K cash (minus closing costs). In 2025, rates average 6.72%, and you can access up to 80% of home equity (90% for VA loans). Use cases: debt consolidation, home improvements, investments. Get pre-approved for cash-out refinance to compare rates from top lenders.
How much cash can I get from a cash-out refinance?
Maximum cash-out amounts by loan type: Conventional = 80% LTV ($400K home = $320K max loan = $120K cash if $200K owed), FHA = 80% LTV, VA = 90% LTV ($400K home = $360K max = $160K cash), Jumbo = 75% LTV. Minimum equity required: 20% remaining after cash-out. Average cash-out amount in 2025: $87,000.
What credit score do I need for a cash-out refinance?
Minimum credit scores: Conventional = 620 (best rates at 740+), FHA = 580 (500 with 10% equity), VA = 580-620 (varies by lender), Jumbo = 700+. Lower scores = higher rates. Example: 620 score = 7.2% rate, 760 score = 6.5% rate. Difference on $300K loan = $125/month savings.
Is a cash-out refinance worth it in 2025?
Worth it if: (1) Current rate is 7.5%+, new rate 6.5-6.9% = savings, (2) Consolidating 18-29% credit card debt, (3) Home improvements add 70-80% ROI, (4) Break-even under 3 years. NOT worth if: Current rate under 5%, staying under 2 years, using cash for depreciating assets. Calculate: (Closing costs) ÷ (Monthly savings) = Break-even months. Use our refinance calculator to determine your break-even point and potential savings.
What are cash-out refinance rates in October 2025?
Current rates (October 2025): 30-year fixed = 6.72% (down from 7.8% in 2023), 15-year fixed = 6.15%, VA cash-out = 6.45%, FHA cash-out = 6.85%. Rates dropped 0.5% after Fed cut. Predictions: 6.4-7.0% through Q4 2025. Best rates for: 740+ credit, 70% LTV, strong DTI under 43%.
How long does a cash-out refinance take?
Timeline: (1) Application: 1 hour, (2) Appraisal: 7-14 days, (3) Underwriting: 2-3 weeks, (4) Closing: 1 day. Total: 30-45 days average. Fastest: 21 days with digital lenders. Delays: Low appraisal (15% of cases), income verification issues, title problems. Speed tips: Pre-gather documents, order appraisal immediately, respond to requests within 24 hours.
What are the closing costs for cash-out refinance?
Closing costs: 2-5% of new loan amount. $300K loan = $6K-15K costs. Breakdown: Appraisal ($500-800), Origination fee (0.5-1% = $1,500-3,000), Title insurance ($1,000-2,000), Credit report ($30-50), Recording fees ($100-500). Ways to reduce: Lender credits (higher rate for $0 closing), Roll into loan (increases balance), Shop 3+ lenders.
Can I do a cash-out refinance with bad credit?
Yes, but harder. Options: (1) FHA cash-out: 580 score minimum, 80% LTV, higher rates (7.5%+), (2) VA cash-out: 580 score, 90% LTV (veterans only), (3) Subprime lenders: 550+ score, 65% LTV, rates 8-12%. Improve approval: Add co-borrower, pay down debt (lower DTI), wait 6-12 months while improving credit, Consider home equity loan instead (easier approval).
Meet David
Refinance & Rate Specialist
David Rodriguez is a seasoned refinancing expert with over 10 years of experience in mortgage rate analysis and market trend forecasting. As a Certified Rate Lock Specialist, he has saved homeowners millions in interest payments through strategic refinancing timing. His expertise in Federal Reserve policy impact and mortgage-backed securities makes him a go-to expert for rate predictions and refinancing strategies.
EXPERTISE:
KEY ACHIEVEMENT:
Saved clients $50M+ in interest payments
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