Current cash-out refinance rates of 2026

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A cash-out refinance is a type of mortgage refinance that turns a portion of your home’s equity into cash. You’ll swap your current mortgage for a bigger loan, pocketing the difference between the two in a lump sum. You can use these funds for any purpose, whether it’s for a home renovation, college tuition or other expenses.

A limited cash-out refinance is similar to a regular cash-out in that you’ll get a new mortgage with a new interest rate — and potentially a new term. The difference: You’ll only receive a small amount of cash proceeds. For a conventional limited cash-out, that amount is no more than 2% of the new mortgage balance or $2,000, whichever is less. This type of refinance might make sense for a borrower with a lower balance to refinance or a minor expense.

Generally, a cash-out refinance takes anywhere from 30 to 60 days to close. The timeline depends on many factors, including how soon your home is appraised and whether your lender needs to follow up in underwriting for outstanding information. You can receive your funds in as little as three days after closing.

Many lenders allow you to tap up to 80% of your home’s current value in a cash-out refinance. Conventional and FHA cash-out refinances are limited to 80% of your home’s value, but with a VA cash-out refinance, you can get up to 100%. USDA loans don’t allow for cash-out refinancing.

You can use cash-out funds for anything — home renovations, debt consolidation, tuition, or a down payment on another property are the most common. What you shouldn't use it for: discretionary spending like vacations, weddings or a car you could finance separately. Those purchases don't build equity, and you'll be paying interest on them for up to 30 years instead of a shorter loan term.

If your new rate is at least 0.75 to 1 percentage point below your current rate and you'll stay in the home past your break-even point, a cash-out refinance can lower your total borrowing cost. If either condition isn't true — your new rate is close to or above your old one, or you plan to move within a few years — a home equity loan or HELOC will almost always cost less to access the same cash. How you plan to use the funds also should factor into your decision. If you're using the money to build equity or improve your overall financial well-being, cash-out refinancing can be smart.

Yes. A cash-out refinance increases your total mortgage debt and puts your home up as collateral for the larger balance. If home values fall or your income changes, you could end up owing more than your home is worth or struggling to make payments. Skip this loan if you're funding discretionary expenses like travel — you'll be paying interest on that spending for decades.

Mortgage interest is deductible on the amount you borrow to buy, build or substantially improve your home. Cash you take out and use for anything else — debt consolidation, tuition, a car — isn't deductible. Talk to a tax professional about how the split affects your specific return.