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Cash-out refinance rates

See rates for cash-out refinancing and how to boost your odds of getting a low rate.

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By

Bethany Hickey

Updated

What is the typical cash-out refi rate?

It’s common to see a rate around 2.8% to 5.4% for a 30-year cash-out refinance, at the time of writing. However, your rate comes down to your credit score, loan amount and loan term.

How much equity do I need for a cash-out refinance?

Lenders typically require at least 20% in equity to be eligible for a cash-out refinance. When it comes to how much you can cash out, it’s generally up to 80% of your home’s current value.

Can I get up to 100% of my home’s value?

Don’t count on it — unless you’re in the armed services. Most lenders cap how much you can pull out, typically up to 80%, and FHA loans are rigidly capped at 80%. However, with a Veteran Affairs (VA) cash-out refi, you could get 100%.

Cash-out refinancing fees

One of the biggest costs to consider when doing a cash-out refi is closing costs, which can be anywhere from 2% to 5% of your loan amount.
Closing costs can include lender origination fees, appraisal fees, title insurance, taxes and more — just like your original mortgage.

Tips for getting a lower cash-out refinance rate

Increasing your chances of getting a low rate on a cash-out refi includes having a credit score above 670, comparing lenders, rate shopping and watching national averages.
It’s also typical to see lower rates offered for shorter loan terms. If you can afford the high monthly payment but really want a low rate, that might be something to consider.
The simplest ways to improve your credit score involve some light work for you:

  • Decrease credit utilization ratio
  • Paying down credit cards below 20% of their borrowing limit
  • Taking care of any unresolved debt or credit disputes
  • Only take on new credit when needed
  • Don’t close out old credit, even if it’s not being used
  • Review your credit reports to remove possible errors

    • Bottom line

    A cash-out refinance can be a great way to get money to improve your home, pay off debts or even get yourself into another home.
    When it comes to rates, one of the best ways to increase your chances of qualifying for a low rate is by having a good credit score. Lenders may require a minimum credit score of 650 or higher. Clean up your credit reports, shop around and compare lenders to up your odds of getting the rate you want.
    Learn more about cash-out refinancing here to explore lenders and see if it’s the right move for you.

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Editor, Banking

Bethany Hickey is the banking editor and personal finance expert at Finder, specializing in banking, lending, insurance, and crypto. Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance, GOBankingRates, SuperMoney, AOL and Newsweek. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt. Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others. Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine. See full bio

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