Best Cash-out Refinance Rates | 2022 Lender Rankings (2023)

Find the best cash-out refi rate for you

Finding your best cash-out refinance rate is important. The lower your rate, the less your interest payments eat into your cash-back.

The companies with the lowest 30-year cash-out refinance rates on average are shown below.

Just remember that cash-out refi rates are based on your personal finances and your home equity. So the “best” deal looks different for everyone. Compare rates from a few different lenders to find your best cash-out rate.

In this article (Skip to...)

• Top 10
• Today’s cash-out rates
• Lender rankings
• Find your best rate
• What affects your rate
• Cash-out closing costs
• Cash-out refi options
• Alternatives
• FAQ

Note: Cash-out refinance rates cited in this article are from 2022 and do not reflect the rate you will be offered today. Interest rates are shown for general comparison purposes only.

Who has the best cash-out refinance rates?

To find the best cash-out refinance rates, we compared average 30-year cash-out rates from the 30 biggest lenders in 2022 (the most recent data available).^1,2

According to the data, the 10 lenders with the best cash-out refinance rates on average are:

1. Navy Federal Credit Union*
2. Bank of America
3. PNC Bank
4. Home Point Financial
5. Truist Bank
6. Guaranteed Rate
7. Pennymac
8. Citizens Bank
9. Mortgage Research Center*
10. JP Morgan Chase Bank

*These lenders specialize in select loan types and may not help every borrower.

A note on today’s cash-out refi rates

We analyzed cash-out refinance rates from 2022, the most recent data available. These rates are based on loan-level data mortgage lenders are required to file each year under the Home Mortgage Disclosure Act (HMDA).

Rates have risen significantly since 2022, and mortgage interest rates shown here do not reflect the rate you’re likely to be offered.

However, these numbers still serve as a helpful starting point for comparing lenders side by side.

Keep in mind that the best lender on average won’t necessarily offer you the lowest mortgage refinance rate. So you shouldn’t just look at the top rankings and stop there. You’ll want to do a little research on your own to find the best interest rate and maximize your savings.

The best cash-out refi rates of 2022, ranked

Here’s how the 30 biggest cash-out refinance lenders in 2023 ranked, from lowest to highest average 30-year rate:

*These lenders specialize in select loan types and may not help every borrower.

What is a cash-out refinance?

In a cash-out refinance, you replace your existing mortgage with a new, larger loan. This new loan pays off your old mortgage, and the remainder, which constitutes the “cash-out” part of the equation, is given to you in a lump sum.

This cash-out amount represents a portion of the equity you’ve accumulated in your home over the years. This cash can then be used for a variety of financial purposes, such as paying off debts, making home improvements, or financing other large purchases.

How does cash-out refinancing work?

Cash-out refinancing operates on the basis of your home equity, which is the difference between the current value of your home and the remaining balance on your existing mortgage. As your home’s value appreciates and you continue to pay down your mortgage, your equity increases.

It’s crucial to remember that the new loan—which includes the remaining balance of your original mortgage plus the cash-out amount—replaces your old mortgage. This means you will be making payments on this larger loan amount, likely over a new repayment term.

Another critical point to consider is that if the loan-to-value ratio of your new mortgage exceeds 80%, you might be required to pay private mortgage insurance (PMI). PMI is an added expense that protects the lender if you default on the loan but does not contribute to your home equity. It’s therefore essential to factor in this potential cost when considering a cash-out refinance.

How much money can you get in a cash-out refinance?

The amount of money you can receive from a cash-out refinance depends on a number of factors, including the equity you’ve built up in your home, the home’s appraised value, your creditworthiness, and your lender’s specific policies.

Generally, most lenders allow you to borrow up to 80–90% of your home’s value, including your current mortgage and the cash out.

For example, if your home is worth $300,000 and you still owe $150,000 on your existing mortgage, you could potentially refinance for up to $240,000 (80% of the home’s value). After paying off the existing $150,000 mortgage, you would receive $90,000 in cash.

How to find your best cash-out refi rate

Let’s start with the obvious. You don’t just want the lowest rate. You want the best overall deal you can get. And that means looking at closing costs as well as mortgage interest rates.

Evaluate cash-out refi costs

You’ll want to find a good deal on closing costs when you do a cash-out refinance because these costs are typically taken out of your cash-back. So the higher they are, the less cash you’ll walk away with.

Of course, it’s always a balancing act. You might care more about a low rate or low upfront costs, depending on your situation.

If you can afford more cash upfront, you might opt for the lowest rate in order to save money long-term. But, if you need every cent you can get, then low loan costs will be your priority.

Shop around for your lowest cash-out refi rate

Different lenders specialize in different borrower profiles. So if your credit score is a bit iffy, your existing debt is high, or you’re cashing out every last dollar possible, some lenders won’t approve your mortgage application. However, other lenders specialize in borrowers just like you.

And it can work the other way around. Because someone with perfect personal finances might not get as good a deal from a lender that’s used to working with less qualified applicants.

So make sure you speak with multiple loan officers, shop around, and compare at least 3-5 personalized cash-out refi quotes. That’s the only way to find the real best deal for your mortgage refinancing.

What affects cash-out refinance rates?

If you’re refinancing, you’ve already been through the mortgage application process as a home buyer. So you’ll know the things loan officers look at when deciding how much to lend you and at what mortgage rate.

However, lenders generally see cash-out loans as a little riskier than an ordinary home loan or refinance. So rates tend to be a little higher for these types of loans. And eligibility requirements may be a bit stricter.

Here are some of the biggest factors that will impact your cash-out refinance loan rate:

• Credit score: You typically need a credit score of at least 620 for a cash-out refi. Some lenders require a higher FICO score. In any case, the better your credit is, the lower your rate will be
• Cash-out amount: The more cash you withdraw from your available equity, the higher rate you’re likely to see on your new loan
• Debt-to-income ratio (DTI): The less you owe in existing debts, the lower your refinance rate is likely to be
• Loan-to-value ratio (LTV): With a cash-out refinance, lenders typically require you to retain 20% of your home’s equity. But the more equity you leave in place beyond that, the lower the refinance rate you stand to get
• Current mortgage rate market: Are current rates high or low when you read this? You can find out here. But remember, rates for cash-out refinances tend to be 0.125% to 0.25% higher than rates rate-and-term (no-cash-out) refinances
• Lender: The lender you choose can make a huge difference to the rate you pay. And you can save several thousand dollars by comparison shopping across several lenders

Nobody expects miracles. And you can only do so much in the months leading up to your mortgage application. But even small improvements to your financial situation — like paying off credit card debt — could improve your cash-out refinance options. And everyone can comparison shop for lenders.

Cash-out refinance closing costs

We’ve already mentioned closing costs. For a cash-out refinance, they’re similar to those you pay for any mortgage: typically between 2% and 5% of the loan amount.

Refinance closing costs typically include:

• Loan origination fee: 1-1.5% of the loan amount
• Discount points (optional): 0-1% of loan amount or more
• Application fee: $75-$300
• Credit check fee: $25
• Home appraisal fee: $500-$1,000+
• Title search and title insurance: $300-$2,000+
• Survey fee: $150-$400
• Attorney fees: $500-$1,000 (not required in every state)
• Recording fees: $25-$250 (depending on location)
• Processing and/or underwriting fee: $300-$900 each
• Prepaid taxes and homeowners insurance: Varies

Of course, you don’t always have to pay these costs and lender fees out of pocket. Many borrowers simply add them to the balance on their new mortgage.

The upside of doing this is that you’re spreading those costs over the term of your mortgage. And you probably won’t even notice the added expense on your mortgage payment each month.

But you should be aware of the downside. Because you’ll be paying interest on those costs, perhaps for 30 years. So it’s not a cheap alternative. And, if you can afford to pay for them yourself, you’ll save in the long run.

Cash-out refinance options

Homeowners who want to cash out their home equity have multiple cash-out options. While most home loans can be refinanced, not all can be cashed out.

Thankfully, the most popular loan programs all offer a version of cash-out refinancing.

Conventional loan cash-out refinance

A conventional cash-out refinance may be ideal for borrowers with good credit scores and more than 20% equity.

Fannie Mae and Freddie Mac set the rules for conventional cash-out refinances.

If you’ve owned your home for a few years, chances are you qualify for this type of loan. Plus, if your current home is financed with an FHA loan, then you can get rid of unwanted mortgage insurance premiums (MIP).

Guidelines will vary depending on your lender, but you should expect to meet these requirements:

• More than 20% equity in your home
• Appraisal to confirm your home’s value
• A credit score of at least 620
• Debt-to-income ratio (including the new loan) of 43% or less
• Loan-to-value ratio of 80% or less
• Employment and income verification

The maximum loan amount for a conventional cash-out refinance is currently $, and up to $ in high–cost real estate markets.

FHA cash-out refinance

Homeowners with an FHA loan have two refinance options.

The FHA Streamline Refinance is a no-cash-out loan. But there’s also an FHA cash-out refinance option that allows borrowers to access 80% of their home’s value.

Eligibility requirements and borrowing costs will vary by lender, but you should generally expect to meet these guidelines:

• The home must have been your primary residence for the past 12 months
• Satisfactory repayment history for the past 12 months, with no 30-day late payments
• Your new loan must conform to FHA loan amounts, which vary by county
• A minimum credit score of 600 is typically required

You’ll need to pay upfront fees, but this expense can be financed into the new loan. As with any FHA mortgage, there’s both an upfront and annual mortgage insurance fee.

VA cash-out refinance

The Department of Veterans Affairs offers two types of mortgage refinancing products: a Streamline Refinance and a cash-out refinance.

With the VA cash-out refinance, borrowers can access 100% of their home’s equity as long the new loan is within maximum guarantee amounts.

You’ll need to meet eligibility requirements set by both the VA and your lender, which include:

• Home appraisal by a certified VA appraiser
• Credit score of at least 580-620, varies by lender
• Debt-to-income ratio below 41%, varies by lender
• Steady income and employment

The VA cash-out refinance is an appealing type of loan because of its high loan-to-value maximum, lack of monthly mortgage insurance, and lenient FICO score guidelines compared to other cash-out loan programs.

Pros and Cons of Cash-Out Refinancing

Cash-out refinancing has gained popularity among homeowners as a potential tool for achieving their financial goals. By replacing an existing mortgage with a new one, cash-out refinancing can be a valuable source of funding.

However, it also carries risks that homeowners need to consider. Here’s a closer look at the pros and cons of this financial strategy.

Pros

• Larger loan, low interest rate: The main advantage of cash-out refinancing is the ability to tap into your home’s equity at relatively low interest rates. This allows homeowners to secure a larger loan than their existing mortgage, often at a lower rate, especially in a falling interest rate environment.
• Consolidation of debt: Cash-out refinancing can be used to consolidate high-interest debts, such as credit card balances or student loans, into a single payment. This can streamline financial management and potentially lower overall interest costs.
• Fulfillment of financial goals: The lump sum procured from a cash-out refinance can be utilized to fund larger financial goals like home improvements, education expenses, or starting a new business.

Cons

• Private mortgage insurance (PMI): If the new loan amount is more than 80% of the home’s value, homeowners may be required to pay private mortgage insurance. PMI is an additional cost that doesn’t contribute to homeownership equity
• Longer repayment period: In most cases, cash-out refinancing results in extending the pay-off date of your mortgage. This means you might be making mortgage payments for a longer time than originally planned
• Risk of foreclosure: Since cash-out refinancing increases your loan amount, it also increases the risk of foreclosure if you are unable to keep up with payments

Before you opt for cash-out refinancing, use a refinance calculator to determine how it will impact your financial situation. Understanding the possible consequences of this decision is key to making an informed choice.

Alternatives to Cash-Out Refinancing

If after analyzing your situation with a refinance calculator and considering potential PMI costs, you find that cash-out refinancing may not be the best option for your financial goals, there are several alternatives available.

• Home equity line of credit (HELOC): A HELOC operates similarly to a credit card and allows homeowners to borrow against their home equity as needed. This flexibility can be beneficial, and interest rates are typically lower than credit card rates
• Home equity loan: A home equity loan is a second mortgage that gives homeowners a one-time lump sum of money, much like a cash-out refinance. However, this does not involve replacing the existing mortgage
• Personal loan: For those who don’t want to tap into their home equity or who don’t have enough equity built up, personal loans can be a viable alternative. These are unsecured loans that can be used for any purpose
• Down payment savings: If your goal is to purchase a second home or rental property, it might make more sense to put aside savings towards a down payment. This will lower the amount you need to borrow and potentially eliminate the need for PMI
• 401(k) loan: Some retirement plans allow you to borrow from your savings, typically at a low interest rate. However, borrowing from your 401(k) should be a last resort as it can impact your long-term retirement savings

Each of these options carries its own risks and benefits. It’s essential to understand the potential implications of each option on your long-term financial health before deciding.

Cash-out refinance rates FAQ

What are today’s cash–out refinance rates?

Mortgage rates are still low compared to most of U.S. history. And homeowners have built up a record amount of equity over the past couple of years.

If you need cash, tapping your equity can be an affordable way to access a large sum of money.

Shop with a few cash-out refinance lenders to see what rates you qualify for today.

¹Rate and fee data were sourced from self-reported loan data that all mortgage lenders are required to file each year under the Home Mortgage Disclosure Act. Averages include all 30-year non-cash-out refinance loans reported by each lender for the previous year. Your own rate and loan costs will vary.

²Top lenders for 2023 based on 2022 HMDA data sourced directly from the HMDA data browser