What’s a cash-out refinance?

Cash-out refinancing is a type of mortgage refinancing that allows you to convert your home equity into cash. It replaces your existing home mortgage with a new, larger loan, and at closing, pays you the difference between the new mortgage amount and the balance on your previous loan.

So if the remaining balance on your mortgage is $150,000 and your home is worth $250,000, you have $100,000 in equity. You could refinance your mortgage for $200,000 and receive $50,000 in cash at closing. You can use the funds for things like home improvements, paying off debt or other financial needs.


See how you could benefit.

Access your equity.

Use the equity in your home to pay for home improvements, college tuition or a down payment on a second home.

Consolidate your debt.

Use the money to pay off high-interest debt, such as credit cards, personal loans and auto loans.

Find affordable options.

Choose from a variety of loan options to find one that matches your financial goals.

What you should know about a cash-out refinance.

When considering a cash-out refinance, it’s important to keep in mind things like your mortgage rate and the amount of home equity you have.

Credit score

Your credit score helps determine the rate you’ll get. When it comes to refinancing, the higher your score, the better. If you’re a U.S. Bank customer, you can check your credit score for free with our tool.


Cash-out refinancing might make sense for you if interest rates are lower than when you took out your mortgage. Though the rates on a cash-out refinance may be slightly higher than they are for a traditional refinance due to the added risk of your loan amount increasing.

Closing costs

A cash-out refinance comes with closing costs comparable to your first mortgage. Typically, you can expect to pay between 2% and 5% of the loan amount. So on a $200,000 home loan refinance, you could pay between $4,000 and $10,000 in closing costs.

Home equity

As a general rule, you should have at least 20% equity in your home before you refinance. You can calculate your home equity by subtracting the amount you owe on your mortgage from the amount your home is worth. For example, if your home is valued at $250,000 and you owe $150,000 on your mortgage, you have $100,000 in equity.

Explore rates for popular refinance options.

Conventional fixed-rate refinance loans

No interest rate changes

Conventional 30-year term
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FHA refinance loans

Lower credit score requirements

FHA 30-year term
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VA refinance loans

Option to make $0 down payment for military members

VA 30-year term
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The rates shown are current as of $date.

These rates are based on some standard assumptions as described below.1 Learn more about interest rates and annual percentage rates (APRs).2 Plus, see an estimated conforming fixed-rate monthly payment and APR example.3

Consider your other mortgage refinance options.

When it comes to refinancing, a cash-out refinance isn’t your only choice.

A traditional refinance is a low-cost option that can lower your monthly payment or allow you to pay off your home sooner.

Mortgage refinance calculator

See how much you could save with our mortgage refinance calculator.

Not sure what your home improvement project could cost?

If you’re thinking about a home improvement project but aren’t sure of the cost, we’re happy to help. Just answer a few quick questions and we’ll give you a personalized estimate based on the average cost of labor and materials where you live.

Get answers to frequently asked cash-out refinance questions.

Featured articles

Should I refinance my mortgage?

Knowing your refinancing options is key to gaining the maximum benefit from your decision. Learn what you should keep in mind.

When is the right time to refinance?

At the right time, refinancing your mortgage could save you money, help you pay off your home faster or unlock the equity in your home.

What’s the refinance process?

The process of refinancing is similar to when you first applied for your mortgage. Take a look at how it works so you know what to expect.

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Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.

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  1. The rates shown above assume you have a FICO® Score of 740+ and at least 25% equity for a conventional fixed-rate loan, an adjustable-rate mortgage (ARM) loan or a jumbo loan, at least 3.5% equity for an FHA loan and no equity for a VA loan. They also assume the loan is for a single-family home as your primary residence and you will purchase up to one mortgage point. Mortgage points, or discount points, are a form of prepaid interest you can choose to pay up front in exchange for a lower interest rate and monthly payment. One mortgage point is equal to about 1% of your total loan amount, so on a $250,000 loan, one point would cost you about $2,500. Connect with a mortgage loan officer to learn more about mortgage points.

  2. Annual percentage rate (APR) represents the true yearly cost of your loan, including any fees or costs in addition to the actual interest you pay to the lender. The APR may be increased after the closing date for adjustable-rate mortgage (ARM) loans.

  3. Conforming fixed-rate estimated monthly payment and APR example: A $464,000 loan amount with a 30-year term at an interest rate of 6.500% with borrower equity of 25% and no discount points purchased would result in an estimated monthly principal and interest payment of $2,933 over the full term of the loan with an annual percentage rate (APR) of 6.667%.

    Estimated monthly payment and APR calculation are based on borrower equity of 25% and borrower-paid finance charges of 0.862% of the base loan amount. If the borrower equity is less than 20%, mortgage insurance may be required, which could increase the monthly payment and the APR. Estimated monthly payment does not include amounts for taxes and insurance premiums and the actual payment obligation will be greater.

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The rates shown above are the current rates for the purchase of a single-family primary residence based on a 45-day lock period. These rates are not guaranteed and are subject to change. This is not a credit decision or a commitment to lend. Your final rate will depend on various factors including loan product, loan size, credit profile, property value, geographic location, occupancy and other factors.

To lock a rate, you must submit an application to U.S. Bank and receive confirmation from a mortgage loan officer that your rate is locked. An application can be made by calling 888-291-2334, by starting it online or by meeting with a mortgage loan officer.

Minnesota properties: To guarantee a rate, you must receive written confirmation as required by Minnesota Statute 47.206. This statement of current loan terms and conditions is not an offer to enter into an interest rate or discount point agreement. Any such offer may be made only pursuant to subdivisions 3 and 4 of Minnesota Statutes Section 47.206.