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Cash-Out Refinance Breakeven Calculator

Find exactly how many months until a cash-out refi's costs pay for themselves.

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Rex says

Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.

Try a scenario

Click to load — tweak from there.

Inputs

Result

Months to break even on closing costs

9

Monthly payment increase

$844

Extra lifetime interest from the cash-out portion

$253,714

New total monthly payment

$2,140

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How to use this

  1. 1Enter current mortgage balance ($).
  2. 2Enter current mortgage rate (%).
  3. 3Enter cash you want to take out ($).
  4. 4Enter new mortgage rate (%).
  5. 5Enter new loan term (years).
  6. 6Enter closing costs ($).
  7. 7Read your months to break even on closing costs on the right — it updates as you type.
  8. 8Hit Share to keep the scenario or send it to someone.

About this calculator

A cash-out refinance replaces your mortgage with a bigger one, pulling the difference out as cash, but it resets your rate on the entire balance, not just the cash-out portion, and comes with closing costs of roughly 2–5% of the new loan. This calculator isolates the breakeven question: given your rate change, the added interest cost of a larger balance, and the closing costs, how many months of the new higher (or lower) payment does it take before the deal has 'paid for itself' relative to just keeping your current mortgage and getting cash another way (like a HELOC or personal loan)? It also flags the pure cost of extracting the cash — since a cash-out refi doesn't just cost you closing fees, it costs you interest on the extracted amount for the life of the new loan, which a straight breakeven-on-closing-costs number often hides.

FormulaPayment difference = new payment − old payment. Breakeven months = closing costs ÷ monthly payment difference (only meaningful if new payment is higher due to added balance, or savings if rate dropped significantly). Total interest cost of the cash = extracted amount financed over the remaining term at the new rate.

Worked example

Using the values the calculator loads with:

Inputs

  • Current mortgage balance: 280000 $
  • Current mortgage rate: 3.75 %
  • Cash you want to take out: 50000 $
  • New mortgage rate: 6.75 %
  • New loan term: 30 years
  • Closing costs: 8000 $

Results

  • Months to break even on closing costs: 9
  • Monthly payment increase: $844
  • Extra lifetime interest from the cash-out portion: $253,714
  • New total monthly payment: $2,140

What each field means

Inputs

Current mortgage balance ($)
The current mortgage balance used in the calculation, measured in $. Starts at 280000 $ so you have a working example on load.
Current mortgage rate (%)
The current mortgage rate used in the calculation, measured in %. Starts at 3.75 % so you have a working example on load. Accepted range: 0–12 %.
Cash you want to take out ($)
The cash you want to take out used in the calculation, measured in $. Starts at 50000 $ so you have a working example on load.
New mortgage rate (%)
The new mortgage rate used in the calculation, measured in %. Starts at 6.75 % so you have a working example on load. Accepted range: 0–12 %.
New loan term (years)
The new loan term used in the calculation, measured in years. Starts at 30 years so you have a working example on load. Accepted range: 5–30 years.
Closing costs ($)
The closing costs used in the calculation, measured in $. Starts at 8000 $ so you have a working example on load.

Results

Months to break even on closing costs
Returned as a whole number and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Monthly payment increase
Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Extra lifetime interest from the cash-out portion
Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
New total monthly payment
Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.

FAQ

Why does a cash-out refi often cost more than it looks like upfront?

Because you're not just paying interest on the $50,000 you pulled out — if rates rose since your original loan, you're now paying the new, higher rate on your entire existing balance too, not just the cash-out amount. That rate reset on the full balance is usually the biggest hidden cost, dwarfing the closing fees.

When is a HELOC or home equity loan better than a cash-out refi?

When your current mortgage rate is well below current market rates. A HELOC or second mortgage lets you tap equity at a new rate on just the amount borrowed, leaving your low-rate first mortgage untouched — often far cheaper than resetting the whole balance to today's rate.

Does the breakeven calculation account for the tax deduction on mortgage interest?

No, this tool ignores tax effects since most homeowners now take the standard deduction and get no marginal benefit from mortgage interest. If you do itemize and the cash-out funds are used to substantially improve the home, consult a tax professional since deductibility rules differ from cash used for other purposes.

Is there a limit on how much cash I can take out?

Lenders typically cap cash-out refinances at 80% loan-to-value for conventional loans (sometimes up to 85% for certain programs), meaning your new loan balance including the cash-out can't exceed that percentage of the home's appraised value.

Accuracy and limitations

  • Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
  • Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
  • This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.

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Mortgage Recast vs. Refinance Calculator

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Mortgage Discount Points Breakeven Calculator

Find out exactly how long it takes discount points to pay for themselves.

Cite this calculator

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APA
RevenueLab. (2026). Cash-Out Refinance Breakeven Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/cash-out-refi-breakeven
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<p>Source: <a href="https://www.revenuelab.fyi/toolbox/cash-out-refi-breakeven" target="_blank" rel="noopener">Cash-Out Refinance Breakeven Calculator — RevenueLab</a> (2026).</p>
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Source: [Cash-Out Refinance Breakeven Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/cash-out-refi-breakeven) (2026).
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