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

• Home improvement and renovation project
• Consolidating high-interest debt
• Paying for college tuition or other education costs
• Making a down payment on an investment property

A cash-out refinance can be a good move if it helps you achieve a financial goal, like consolidating high-interest debt or funding home improvements. However, you need to secure a competitive interest rate and stay in your home long enough to recoup closing costs. Weigh the long-term costs against the benefits when you’re considering cash-out refinancing. 

There’s a certain risk to a cash-out refinance since you’re replacing your existing mortgage with a larger one, meaning you’re increasing your overall debt. If home values decline or your financial situation changes, you could end up owing more than your home’s value or struggle with payments. That’s why it’s best to avoid this type of loan if you’re planning to use the funds on discretionary expenses like travel. 

With a regular mortgage, you can typically deduct mortgage interest on your tax return. However, in the case of a cash refinance, that deduction only applies if you use the funds to make home improvements. Consult with a tax professional to determine how a cash refinance can affect your tax bill.