Current cash-out refinance rates

Today’s cash-out refinance rates

As of Q4 2025, cash-out refinance rates are hovering between 6.5% and 6.75%. Rates are expected to decline slightly over the next year, but not drastically. 

Because cash-out refinances are considered riskier than their rate-and-term counterparts, cash-out refi rates are generally higher than regular refinance rates — specifically, between one-quarter and one-half a percentage point higher. To get the most competitive rates, it’s best to shop around and obtain quotes from several lenders.

Factors influencing cash-out refinance rates

Like all mortgage rates, cash-out refinance interest rates are affected by both personal and market factors, such as:

• Credit score
• Debt-to-income (DTI) ratio
• Lender policies
• Federal Reserve’s monetary policy
• Economic conditions

How to get the best cash-out refinance rate

Because you’re taking out a bigger loan with a cash-out refinance, it’s all the more important to find the best possible rate. Here’s how:

• Review your credit. You won’t get the best interest rate possible if your credit score needs work. Well ahead of applying for a cash-out refinance, check your credit reports and scores. Many lenders allow you to qualify with a score as low as 620, but the best rates go to borrowers with a score of 740 or higher. Here’s more on how to improve your credit for a mortgage, plus bad-credit refinance options.
• Take stock of what you already owe. If you have other debt, like a car loan or student loans, these factor into your debt-to-income (DTI) ratio. The lower your DTI ratio — ideally 45% or less — the better your chance of getting a lower rate. To find out yours, use our DTI calculator.
• Compare cash-out refinance loan types. Considering the different types of cash-out refinance loans can help identify the best choice for your situation. (And as you explore different loan types, it’s a good idea to compare the lenders that offer them, too.) While eligibility varies by program, the options include:

  • Conventional cash-out refinance: These loans are open to borrowers with many loan types — for example, if your original loan was an FHA loan, you may still qualify for a conventional cash-out refinance. You may also perform a cash-out refinance on an investment property. However, they tend to have the most stringent financial qualifications.

  • FHA cash-out refinance: You may use an FHA cash-out refinance even if you started out with a conventional loan or other loan type. However, like all government-backed loans, you can't use one to refinance an investment property. Like FHA purchase loans, these may have more flexible qualifications than a conventional cash-out refinance.

  • VA cash-out refinance: Similar to VA purchase loans, these are available only to qualifying active-duty service members, veterans and surviving spouses.

How much cash can you get in a cash-out refinance?

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.

Uses for a cash-out refinance

You can use money from a cash-out refinance however you want, but some of the most common uses include:

• Home improvement and renovation projects
• Consolidating high-interest debt
• Paying for education
• Making a down payment on an investment property

While there are valid reasons for a cash-out refinance, you should consider the pros and cons as well. They include:

Pros of cash-out refinance

• Access to cash: You can turn your equity into a liquid asset to cover home repairs, pay for college tuition or consolidate debt.
• Home value increase: If you use a cash-out refinance to renovate your home with a kitchen remodel or an addition, for instance, you could grow your home's value.
• Lower interest rates: Mortgages come with lower interest rates when compared to credit cards, personal loans and other forms of debt. You can use a cash-out refinance to pay off this higher-interest debt and improve your credit score by lowering your credit utilization.

Cons of cash-out refinance

• Increased debt load: A cash-out refinance replaces your old mortgage with a new, larger mortgage. This means you’ll likely have a higher monthly payment unless you refinance to a much lower rate than what you're currently paying.
• Closing costs: You’ll have to pay for some closing costs like you did for your original mortgage. Refinancing costs between 2% and 6% of the new loan amount. For a $300,000 loan, that translates to $3,000 to $12,000.
• Foreclosure risk: Unlike credit cards and personal loans, mortgages are secured debt, with your home as collateral. If you’re unable to make your mortgage payments, your home will eventually be subject to foreclosure.

Additional resources on cash-out refinancing

• Refinancing for home improvement: How it works
• FHA cash-out refinance guide
• Is doing a VA cash-out refinance a good idea? Here’s what to know