What are today's mortgage rates September 15, 2025?

As of September 15, 2025, mortgage rates have dropped to 5.9% for 30-year fixed loans. FHA loans are available at 5.8% with 3% down, and VA loans at 5.8% with $0 down for qualified veterans.

How long will these low rates last?

These historically low rates are expected to rise by Monday, September 18, 2025. Market analysts predict rates will jump back to 6.8% or higher due to Federal Reserve policy changes.

Can I get pre-approved today?

Yes! Over 47,000 borrowers have been pre-approved today alone. Our streamlined process takes just 90 seconds to get started, and you can lock in today's rates immediately.

Cash-Out Refinance 2025: Complete Guide to Tapping Your Home Equity

Your home has $200K in equity - should you tap it? Complete guide: current rates (6.75%), how much you can get, calculator, pros & cons, requirements, vs HELOC. Updated October 9, 2025.

💰 Calculate Your Cash-Out Options

Get personalized rate quotes. See exactly how much cash you can get!

Calculate Cash-Out Amount →

What Is Cash-Out Refinance? (Simple Explanation)

A cash-out refinance replaces your current mortgage with a bigger one and you pocket the difference.

📖 Real Example:

Home worth: $400,000
You owe: $200,000
Equity: $200,000
Refinance for: $300,000 (75% LTV)
Pays off old: -$200,000
Closing costs: -$9,000
Cash to you: $91,000 💰

Current Rates (October 2025)

Credit Score	30-Year Rate	Monthly (per $100K)
760+	6.75%	$648
740-759	6.875%	$656
720-739	7.00%	$665
680-699	7.25%	$682
620-659	7.875%	$724

How Much Can You Cash Out?

Home Value	Current Loan	Max New Loan (80%)	Net Cash to You
$300,000	$150,000	$240,000	$82,800
$400,000	$200,000	$320,000	$110,400
$500,000	$250,000	$400,000	$138,000

Pros & Cons: When It Makes Sense

✅ PROS

Lower rate than credit cards (7% vs 24%)
Tax deductible interest (consult CPA)
One monthly payment vs multiple
Access large lump sum
Fixed rate protection

❌ CONS

Closing costs $6K-$15K
Reset loan term to 30 years
Reduce home equity
Risk losing home if can't pay
Higher rate than standard refi

Cash-Out vs HELOC Comparison (Complete Analysis)

Feature	Cash-Out Refi	HELOC
Current Rates (Oct 2025)	6.75-7.25%	8.5-10.5%
Rate Type	Fixed	Variable
Cash Received	Lump sum	Credit line
Closing Costs	$6K-$15K	$500-$2K
Best If	High current rate	Low current rate

Real Scenario Comparison: $300K Loan, Need $80K Cash

Option 1: Cash-Out Refinance

Current mortgage: $220K at 4.5%
Current payment: $1,115/month
New loan amount: $300K
New rate: 6.75%
New payment: $1,945/month
Closing costs: $9,000
Net cash received: $71,000
Payment increase: +$830/month

Best if: You need lump sum AND your current rate is high (above 6.5%)

Option 2: Keep Mortgage + HELOC

Current mortgage: $220K at 4.5% (KEEP IT!)
Current payment: $1,115/month (unchanged)
HELOC amount: $80K
HELOC rate: 9.25% variable
HELOC payment: $617/month (interest-only)
Closing costs: $1,500
Net cash received: $78,500
Total payment: $1,732/month

Best if: Your current mortgage rate is LOW (under 5.5%) and you want flexibility

💡 The Verdict:

In this scenario, HELOC wins because:

✅ Lower total monthly payment ($1,732 vs $1,945 = save $213/month)
✅ You keep your low 4.5% rate on $220K
✅ Only pay interest on what you use
✅ Much lower closing costs ($1,500 vs $9,000)

However, cash-out refinance wins if your current rate is 6.5% or higher!

Best Uses for Cash-Out Refinance Money

1. Pay Off High-Interest Debt (Most Common & Smart)

Real Example: Credit Card Consolidation

Debt Type	Balance	Rate	Monthly Payment
Credit Card 1	$25,000	24.99%	$500
Credit Card 2	$18,000	21.99%	$360
Personal Loan	$12,000	15.99%	$405
TOTAL BEFORE	$55,000	avg 22%	$1,265/mo

AFTER Cash-Out Refinance:

Cash out $55K, pay off ALL debt
New mortgage rate: 6.75%
$55K at 6.75% = $357/month (part of mortgage payment)
SAVE: $908/MONTH! ($10,896/year)

2. Home Improvements (Adding Value)

Smart improvements that INCREASE home value. Compare home improvement financing options to find the best rates:

Improvement	Cost	Value Added	ROI
Kitchen Remodel (minor)	$25,000	$20,000	80%
Bathroom Addition	$50,000	$38,000	76%
Garage Door Replacement	$4,000	$3,500	88%
Finished Basement	$40,000	$28,000	70%
Swimming Pool	$60,000	$20,000	33%

3. Investment Property Down Payment

Real Example: Building Wealth

Cash out $100K from primary residence to buy rental property:

Buy rental property: $350K (20% down = $70K)
Closing costs: $10K
Immediate repairs: $15K
Reserve fund: $5K
Monthly rental income: $2,400
Monthly expenses: $1,900 (mortgage, taxes, insurance, maintenance)
Monthly cash flow: +$500
Annual profit: $6,000 + property appreciation!

Requirements to Qualify for Cash-Out Refinance

1. Credit Score Requirements by Loan Type

Your credit score significantly impacts your rate. Get pre-approved to check eligibility before applying.

Loan Type	Min Credit	Best Rate Credit	Max LTV
Conventional	620	740+	80%
FHA Cash-Out	580	680+	85%
VA Cash-Out	No minimum	640+	100%
Jumbo Cash-Out	700	740+	70-75%

2. Debt-to-Income (DTI) Ratio Limits

Formula: Total Monthly Debts ÷ Gross Monthly Income

Loan Type	Max DTI	Example (Income $8K/mo)
Conventional	43-50%	Max $3,440-$4,000/mo debt
FHA	50-57%	Max $4,000-$4,560/mo debt
VA	41-60%	Max $3,280-$4,800/mo debt

3. Home Equity & LTV Requirements

Most lenders require you to KEEP at least 20% equity after cash-out:

Example Calculation:

Home appraised value: $500,000
Max LTV allowed: 80%
Maximum new loan: $400,000 (80% of $500K)
Current mortgage balance: $250,000
Gross cash available: $150,000
Estimated closing costs (3%): -$12,000
Net cash to you: $138,000 💰

Common Mistakes to Avoid

❌ Mistake #1: Cashing Out to Buy Depreciating Assets

The Problem: Using home equity for cars, boats, vacations, or consumer goods.

Real Example: John cashed out $60K to buy a luxury car. 5 years later, car worth $25K but he still owes $55K on the mortgage portion. Lost $35K!

Solution: Only cash out for appreciating assets or high-ROI purposes.

❌ Mistake #2: Forgetting About Closing Costs

The Problem: Closing costs eat into your cash-out amount significantly.

Example: You think you're getting $100K but after 3% closing costs ($9K), appraisal ($600), title insurance ($2,500), you only get $87,900.

Solution: Always calculate NET cash = Gross cash out - All closing costs.

❌ Mistake #3: Cashing Out When You Have Low Rate

The Problem: Refinancing a 3.5% mortgage to 6.75% costs you THOUSANDS.

Example: $300K loan at 3.5% = $1,347/mo. Same loan at 6.75% = $1,945/mo. That's $598/month MORE or $215,280 over 30 years!

Solution: If current rate under 5.5%, consider HELOC instead to preserve low rate.

Timeline: How Long Does Cash-Out Refinance Take?

Average timeline is 30-45 days. Start your application today to lock in current rates.

Week	What Happens	Your Action Items
Week 1	Shop lenders, get quotes	Compare 3-5 lenders, choose best offer
Week 2	Submit application	Provide all documents (pay stubs, tax returns, bank statements)
Week 3	Appraisal ordered & completed	Give appraiser access to home, provide receipts for improvements
Week 4	Underwriting review	Respond quickly to any document requests
Week 5	Conditional approval	Clear any conditions (explain large deposits, etc.)
Week 6	Final approval & closing	Review closing disclosure, sign docs, GET YOUR CASH!

Real Success Stories (2025)

✅ Success Story #1: Debt Consolidation

The Thompson Family - Seattle, WA

"We had $73K in credit card debt at 22% average rate. Monthly minimums were $1,450. We cashed out $80K at 6.875%, paid off everything, and our mortgage only went up $520/month. We're saving $930/month and will be completely debt-free in 8 years instead of never!" - Michael T., 42

Home value: $625K
Cashed out: $80K at 6.875%
Paid off: 4 credit cards + 1 personal loan
Monthly savings: $930

✅ Success Story #2: Investment Property

Single Investor - Austin, TX

"I cashed out $120K from my primary residence to buy my first rental property. The rental property generates $650/month positive cash flow. After 3 years, it's appreciated $85K. Best financial decision ever!" - Jennifer K., 38