Cash-Out Refi to Invest Calculator
Weigh borrowing against your home equity to invest: the extra mortgage cost of the cash versus what that money might grow to in the market.
How it works
Extra payment = pmt(cash, new rate, term) · Borrowing interest = extra payment × months − cash · Net = investment gain − borrowing interest
A cash-out refinance turns home equity into investable cash, but that cash is a loan you repay with interest for the full term. This tool isolates the decision: it prices the extra payment and lifetime interest of borrowing the cash, then compares that against the growth if you invest it instead. The bet only works if your after-tax investment return clears the mortgage rate over your holding period — and unlike the guaranteed interest cost, the return is not promised.
Worked example
Taking $50,000 at 6.5% over 30 years adds about $316 a month and roughly $63,000 of interest across the loan. After $3,000 of closing costs you invest $47,000; at 7% for 30 years it grows to about $358,000, a gain near $311,000. That dwarfs the interest cost on paper — but it hinges on three decades of solid returns and leverages your home.
Frequently asked questions
Is this a safe way to invest?
No — it is leverage. You take on guaranteed debt secured by your home to chase uncertain market returns. A prolonged downturn early on can leave you paying interest on money that has lost value, so it suits only investors with a long horizon and high risk tolerance.
Why is the interest cost lower than the total payments?
Because most of each payment eventually repays the principal you borrowed, which is not a cost — you keep that value. Only the interest portion is the true price of borrowing, which is what this tool compares against your investment gain.
What about the rate on my existing balance?
This tool prices only the cash-out portion. If refinancing also raises the rate on your existing balance, factor that in separately — a cash-out that resets a low-rate mortgage to a much higher rate is often a poor trade.
Related calculators
This is an educational estimate, not financial advice. Real results depend on rates, taxes, fees and market returns that no calculator can guarantee — confirm figures with your lender or a licensed advisor.