Cash Out Refinance Rates: What to Know in 2026

Tapping into your home equity can be a smart move—especially when you need funds for big expenses like home renovations, debt consolidation, or even a down payment on another property. One popular way to do this is through a cash-out refinance. But before you dive in, you’ll want to understand the current cash-out refinance rates and how they stack up in today’s market.

Let’s break it all down—from how these rates are determined to the best ways to secure a low one in 2026.

What Is a Cash Out Refinance?

A cash out refinance is when you replace your existing mortgage with a new, larger loan—and pocket the difference in cash. For example, if your home is worth $400,000 and you owe $250,000, you may be able to refinance up to 80% of your home’s value ($320,000), giving you $70,000 in cash (minus closing costs).

Why Consider It?

• Home improvements
• Paying off high-interest debt
• Investing in a second home or business
• Emergency funds

How Do Cash Out Refinance Rates Work?

Cash out refinance rates are generally a bit higher than standard refinance rates. Why? Because there’s more risk for the lender—you’re borrowing more than you currently owe.

Here’s what affects the rate you’ll be offered:

Credit Score

The higher your credit score, the lower your interest rate is likely to be. Aim for 680+ to access the most competitive rates.

Loan-to-Value Ratio (LTV)

Most lenders cap your LTV at 80% for a cash out refi. The less you borrow compared to your home’s value, the better your rate.

Home Equity

More equity = more borrowing power + better rates.

Loan Term

A 15-year term may have a lower rate than a 30-year, but the monthly payments will be higher

Current Cash Out Refinance Rates in 2025

While rates fluctuate daily, here’s a snapshot of what cash out refinance rates look like at the start of 2025:

Tip: Rates vary by lender, so always compare offers. Want a quick monthly payment estimate? Use our Mortgage Calculator.

Cash Out Refinance vs. Home Equity Loan

Not sure whether to refinance or take out a second loan? Here’s a quick breakdown:

How to Get the Best Cash Out Refinance Rates

Securing a good deal takes some prep. Here’s how to stack the odds in your favor:

Improve Your Credit

Pay down debts, check for errors, and aim for a score of 700+.

Shop Multiple Lenders

Even a 0.25% difference can save thousands over time. Request at least 3 quotes.

Lock In at the Right Time

Rates change daily. Keep an eye on economic trends or lock when rates dip.

Lower Your Debt-to-Income Ratio

Lenders prefer borrowers who aren’t stretched thin. Keep your DTI below 43%.

Is Now a Good Time for a Cash Out Refinance?

That depends on your financial goals. Here are some questions to ask yourself:

• Is your current interest rate higher than what you’d get now?
• Do you have enough equity built up (at least 20%)?
• Can you afford the new monthly payment?
• Do you need the cash for something that adds value (like renovations)?

If you answered yes to most of the above, it could be a smart financial move.

Final Thoughts

A cash out refinance can be a powerful financial tool—but only if you lock in a great rate and use the money wisely. In 2025, with rates still fluctuating, shopping around and being financially prepared is key.

Before you sign, use our helpful tools at What’s My Payment to estimate your new payment and compare options. It’s your equity—make it work for you.

FAQs

What are current cash out refinance rates?

As of April 2025, average cash out refinance rates range from 6.25% to 7.25%, depending on your loan type and creditworthiness.

Is a cash out refinance worth it?

It can be—especially if you need funds for something important and can qualify for a lower rate than your current mortgage.

How much cash can I take out?

Most lenders allow up to 80% of your home’s value, minus what you still owe. Your equity and credit will affect the amount.