TL;DR: For a conventional cash-out refinance on a primary residence, you generally need to keep at least 20% equity in the home after the refinance — the new loan is capped around 80% of appraised value. Your maximum cash is roughly (home value × 0.80) − current balance − closing costs. And remember what the cash is: equity converted into a larger loan.
How much equity do you need for a cash-out refinance?
The short answer: enough that after the refinance, you still own at least 20% of your home. For a conventional cash-out refinance on a primary residence, lenders typically cap the new loan at 80% of the home's appraised value — the loan-to-value (LTV) limit. Since the new loan has to pay off your current mortgage first, your available cash is whatever room is left under that cap, minus closing costs.
So the equity question is really two questions: do you clear the bar at all, and if so, how much cash does your equity actually translate to? Both take about a minute to estimate.
What is the 80% LTV rule?
LTV is your loan balance divided by your home's value. An 80% cap on a cash-out refinance means the new loan — old balance plus cash plus any financed costs — can't exceed 80% of the appraised value. Flip it around and it's an equity floor: at least 20% of the home's value stays yours.
That floor exists for a reason worth liking. The equity you're required to keep is your cushion — it's what protects you from owing more than the home could sell for if prices dip, and it's why a cash-out refinance, done inside these limits, doesn't put you underwater the way maxing out your equity would.
How to calculate your maximum cash-out
Three steps, with your own numbers:
- Multiply your home's value by 0.80. Use an honest estimate — the appraisal will set the final figure.
- Subtract your current mortgage balance. The number on your latest statement.
- Subtract closing costs. Third-party and prepaid costs (appraisal, title, recording, prepaid interest) apply at every lender; with Athena there are no lender fees on top of them, and zero discount points required.
Three hypothetical scenarios to make it concrete:
| Home value | 80% cap | Current balance | Room under the cap | |
|---|---|---|---|---|
| Plenty of equity | $400,000 | $320,000 | $180,000 | $140,000 |
| Moderate equity | $350,000 | $280,000 | $240,000 | $40,000 |
| Not enough | $300,000 | $240,000 | $250,000 | None — balance already exceeds the cap |
"Room under the cap" is before closing costs, so cash in hand runs lower. And a sanity check that matters more than any formula: in scenario one, taking the full $140,000 means your mortgage grows from $180,000 to $320,000. The cash isn't a windfall — it's your equity, converted into debt you'll repay with interest. Take what the plan needs, not what the cap allows.
What if you don't have enough equity?
If your balance is already near or above 80% of your home's value, a cash-out refinance isn't available today — but the situation isn't permanent. Equity grows from two directions: every payment reduces the balance, and any appreciation raises the value. If your goal was a better rate or term rather than cash, a rate-and-term refinance has more forgiving LTV limits and doesn't touch your equity at all.
What we'd caution against: stacking a second loan on thin equity just to get cash sooner. Thin equity plus more debt is exactly the position the 20% floor exists to prevent.
Does the appraisal decide everything?
Effectively, yes. Your estimate gets the process started, but the appraised value sets the real cap. If the appraisal comes in lower than expected, your maximum cash shrinks dollar-for-dollar with it — and if it comes in higher, it grows. This is why Athena shows you your numbers again after appraisal, before anything is final: the decision should be made on the real figure, not the estimate.
What about Texas?
Texas applies its own constitutional rules to cash-out refinancing, including a stricter LTV limit. Athena's cash-out refinance is not available in Texas; Texas homeowners can still refinance rate-and-term with Athena.
Frequently asked questions
Can I do a cash-out refinance with 15% equity?
Generally not on a conventional loan — you'd already be above the 80% LTV cap before taking any cash. Rate-and-term refinancing may still be an option.
Does the 80% rule apply everywhere?
It's the typical cap for a conventional cash-out refinance on a primary residence. Different property types and occupancy (second homes, investment properties) carry different limits, and Texas has its own rules.
How do I find out my home's value?
For planning, use recent comparable sales in your neighborhood rather than a single online estimate. The appraisal ordered during your application sets the official number.
Does checking my options affect my credit?
At Athena, seeing your options uses a soft credit inquiry — no impact to your credit score. A hard pull happens later, with a full application.
Is it bad to use all my available equity?
The cap keeps 20% in the home, but "allowed" and "advisable" aren't the same thing. The less equity you keep, the thinner your cushion against a market dip and the larger the loan you carry. Size the cash to the purpose.
How much equity will I have left afterward?
At least 20% of appraised value if you take the maximum — more if you take less. Your offer at Athena shows the before-and-after equity side by side.
Want the real numbers instead of estimates? See your cash-out options at athenamoney.co — your equity, your cap, and both sides of the trade on screen, with no credit impact to look.
Educational content — not a loan offer, rate quote, or personalized advice. A cash-out refinance replaces your mortgage with a new, larger loan and reduces your home equity. "No lender fees" means Athena charges no origination, application, processing, or underwriting fees; third-party and prepaid costs such as appraisal, credit, title, recording, and prepaid interest still apply. Zero discount points required — buying your rate down is always optional. Rates, savings, and terms depend on your credit profile, loan amount, and market conditions; see your Loan Estimate for actual figures. Athena's cash-out refinance is not available in Texas. For Athena's current state licenses, see athenamoney.co/licensing.
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