VA cash-out refinance: how much you can take and what it costs
Reviewed by the Editorial Team · Updated October 22, 2026 · 9 min read
A VA cash-out refinance replaces your mortgage, VA or not, with a new VA-backed loan for more than you owe and pays you the difference. It can reach 100% of the home's value, more than any other mainstream cash-out loan, but the funding fee and a reset rate decide whether it pays.
Calculate your VA cash in hand The most you can take at 100%, the funding fee, your new payment, and whether a second loan costs less.
Key takeaways
A VA cash-out refinance can borrow up to 100% of your home's value, with a financed funding fee counted inside that limit.
The funding fee is 2.15% of the loan on first use and 3.3% after; veterans receiving disability compensation pay none.
Refinancing a VA loan needs 210 days and six monthly payments on it first, and the new loan must show a net tangible benefit.
In 2025, lenders made 83,406 VA cash-out refinances at a median 6.25% and approved 59.4% of applications they decided.
Max loan-to-value
100%, funding fee included
Funding fee
2.15% first use · 3.3% after
Seasoning (VA loans)
210 days and six payments
Can refinance
VA and non-VA mortgages
VA 30-year average6.71%Optimal Blue OBMMI · Nov 5, 2026. Cash-out quotes can run higher.
Most cash on $400k owing $250k$141,581VA at 100% with the fee, vs. $70,000 conventional. See the table ↓
How a VA cash-out refinance works
A VA cash-out refinance pays off your current mortgage with a new, larger VA-backed loan and hands you the difference at closing. The loan you replace doesn't have to be a VA loan: a conventional or FHA mortgage can move into the VA program the same way.
Get your Certificate of Eligibility (COE) from VA or through your lender
Receive the lender's loan comparison within 3 business days of applying
Underwriting checks credit, income and VA's residual-income test
Review the second loan comparison at closing, then sign
The new loan pays off the old one; the rest goes to you
You must live in the home as your primary residence. The cash can go to anything, from debts to repairs to tuition, though what you spend it on decides whether any of the interest is deductible.
How much cash you can take out
VA caps the new loan at 100% of the home's reasonable value, and a financed funding fee must fit inside that cap: any part of the fee that would push the loan past it is paid in cash at closing. Many lenders also set a lower limit of their own.
Cash available on a $400,000 home with $250,000 owed, before closing costs
How much cash you can take out
Loan and limit
Largest loan
Cash out
Conventional cash-out, 80%
$320,000
$70,000
FHA cash-out, 80%
$320,000 + upfront MIP
$70,000
VA cash-out, lender cap of 90%
$360,000 incl. fee
$102,423
VA cash-out, 100%
$400,000 incl. fee
$141,581
The VA rows assume the first-use funding fee, financed. The 100% row is what sets VA apart: no other mainstream cash-out loan lets you borrow all of your equity. It also leaves you with none, which matters if prices dip or you need to sell soon.
What a VA cash-out refinance costs
Take a $400,000 home with $250,000 owed and a $60,000 need. The table prices the same $310,000 refinance with each funding-fee tier and as a conventional cash-out, at this week's averages from the same survey.
Worked exampleYou owe $250,000 on a $400,000 home and want $60,000: what a VA cash-out costs
What a VA cash-out refinance costs
Route
New loanfee financed
Loan-to-value
Monthly P&I30-yr fixed
VA, first use $6,665 funding fee
$316,665
79.2%
$2,045
VA, later use $10,230 funding fee
$320,230
80.1%
$2,068
VA, fee-exempt disability compensation
$310,000
77.5%
$2,002
Conventional cash-out at 7.09%
$310,000
77.5%
$2,081
Most cash with VA$141,581up to 100% of value, the 2.15% fee included
Most cash with conventional$70,000capped at 80% of value
VA rate: Optimal Blue OBMMI 30-year VA average 6.71% (Nov 5, 2026); conventional: OBMMI 30-year conforming 7.09%, same source and date. Funding fee from VA.gov's cash-out row, financed into the loan. Closing costs excluded on every row; principal and interest only. Run your own VA numbers
The first-use fee adds $6,665 to the loan and $43 a month to the payment. At these averages the VA route still costs less each month than a conventional cash-out of the same size, and it can reach $71,581 more cash.
The funding fee, by use
VA funding fee on a cash-out refinance
The funding fee, by use
Situation
Fee
On the $310,000 example
First use of your VA home loan benefit
2.15%
$6,665
After first use
3.3%
$10,230
Receiving VA disability compensation
None
$0
Surviving spouse receiving DIC
None
$0
Active-duty Purple Heart recipient
None
$0
Unlike a purchase, a cash-out refinance has no down-payment tier that lowers the fee. You can pay it at closing or finance it, as long as the financed loan stays inside the 100% cap.
On top of the fee
Closing costs come in addition to the funding fee: origination, appraisal, title and recording. Across VA cash-out loans in 2025, the median total was $12,387, funding fees included for borrowers who paid one.
What VA cash-out borrowers actually got
Federal HMDA records list every VA cash-out refinance lenders made. In 2025 that was 83,406 loans from 691 lenders, at a median rate of 6.25% on a 30-year fixed.
VA cash-out refinances made in 202583,406by 691 lenders
Approval rate59.4%vs. 73% for conventional cash-out
Median rate, 30-year fixed6.25%−0.09 pts vs. the market rate
Median closing costs$12,387on a median $325,000 loan
How much of the home's value they borrowed (loan-to-value, median 89%)
60% or less8.4%
60–70%7.9%
70–80%14.1%
80–90%33.9%
90–95%5.5%
Over 95%30.2%
Lenders that made the most VA cash-out refinances in 2025
Source: HMDA loan-level records for 2025 (FFIEC / CFPB), pulled Oct 22, 2026. Approval rate = loans made ÷ (loans made + denials). Rates and costs are medians for first-lien, owner-occupied, one-unit 30-year fixed loans; a lender's medians need at least 100 loans. Rates are from 2025, not today. HMDA has no credit scores, so these are not quotes. VA closing costs include the funding fee for borrowers who pay it; veterans with a service-connected disability are exempt, so costs vary widely.
Two numbers stand out. The median loan-to-value was 89%, and 30% of borrowers went above 95%, so the 100% limit gets used. Lenders also approved only 59.4% of the applications they decided, against 73.0% for conventional cash-out loans.
The market is concentrated: United Wholesale Mortgage alone made 16% of these loans, and the three largest lenders made 39%. Closing costs differ widely from lender to lender, so compare loan estimates line by line.
VA rules: seasoning, net tangible benefit and recoupment
Federal rules limit quick, repeated VA refinances. If the loan you are replacing is a VA loan, the new one can't close until 210 days after its first payment was due and six monthly payments have been made, whichever comes later.
Seasoning: 210 days and six payments on an existing VA loan
Net tangible benefit: the new loan must be in your financial interest
Loan comparison: within 3 business days of applying and again at closing
Recoupment: fees recouped within 36 months when the loan doesn't exceed the payoff
A true cash-out, where the new loan is larger than the payoff, counts as meeting the recoupment test once the other rules are met. The 36 months clock mainly bites on refinances that take little or no cash.
Moving a conventional or FHA loan into VA skips the seasoning rule, which applies only when the loan being replaced is VA-guaranteed. The comparison disclosure and net tangible benefit still apply.
When a VA cash-out refinance goes wrong
The strengths of a VA cash-out, a high limit and no monthly mortgage insurance, are also how it gets borrowers into trouble. Four risks deserve a hard look before you sign.
Lost low rate: a rate locked years ago may sit far below today's
No equity cushion: at 100%, selling soon could mean bringing cash to closing
Fee on the whole loan: the funding fee is charged on the full balance
Longer payoff: a new 30-year term restarts the clock on debt you had paid down
Be wary of repeated refinance offers built around a large upfront cash figure. The seasoning and recoupment rules exist to stop fee-heavy refinances of the same loan over and over.
Before you sign
Price the cash-out against keeping your rate and adding a home equity loan for the same cash. The cash-out refinance calculator compares both, funding fee included, over five or ten years.
VA cash-out vs. other ways to tap equity
A VA cash-out is one of four ways a veteran can turn home equity into cash or a better rate. They differ in how much you can borrow, what you pay upfront and which balance gets the new rate.
VA cash-out, VA streamline (IRRRL), conventional cash-out and home equity loan
VA cash-out vs. other ways to tap equity
VA cash-out
VA IRRRL
Conventional cash-out
Home equity loan
Cash to you
Yes
No
Yes
Yes
Borrowing limit
100% of value
Not a cash loan
80% of value
Often 80–85% combined
Upfront fee
Funding fee 2.15%–3.3%
Smaller funding fee
None
None
Monthly mortgage insurance
None
None
None at 80% or less
None
New rate applies to
The whole new loan
The whole loan
The whole new loan
The second loan only
Existing loan must be
Any mortgage
A VA loan
Any mortgage
Kept in place
If you only want a lower rate on a VA loan, the IRRRL is the cheaper path. The cash-out is for when you need money out, want to borrow past 80%, or want to move a non-VA loan into the VA program.
Who a VA cash-out refinance fits
A VA cash-out refinance fits eligible borrowers whose current rate is no better than today's, who need a large one-time sum, and who would gain from VA pricing over a conventional loan.
A current rate near or above today's VA average
A large, one-time need such as high-interest debt or a major repair
A conventional or FHA loan you want to move into VA
A plan to stay in the home for years, not months
VA cash-out refinance: pros and cons
Pros
Borrow up to 100% of value, more than any other cash-out loan
No monthly mortgage insurance at any loan-to-value
Refinances VA and non-VA loans alike
No funding fee if you receive VA disability compensation
Cons
Funding fee of 2.15%–3.3% on the whole loan
Replaces a possibly lower rate on your entire balance
Borrowing near 100% leaves no equity cushion
Seasoning rules delay refinancing a recent VA loan
What lenders check
VA sets no minimum credit score; lenders do, and many look for about 620 or higher. Underwriters also apply VA's residual-income test and a debt-to-income guideline near 41%, counting the new, larger payment.
Requirements at a glance
A Certificate of Eligibility for a VA-backed home loan
The home is your primary residence
A loan at or below 100% of the appraised value, financed funding fee included
On a VA loan: 210 days and six payments before refinancing
Credit and income that meet VA and lender standards, including residual income
A net tangible benefit, shown in the lender's loan comparison
How much cash can I get with a VA cash-out refinance?
Up to 100% of the home's appraised value minus what you owe, with a financed funding fee counted inside that limit. On a $400,000 home with $250,000 owed, that's about $141,581 before closing costs at the first-use fee. Many lenders cap below 100%, which lowers the figure.
What is the VA funding fee on a cash-out refinance?
It is 2.15% of the loan the first time you use your VA home loan benefit and 3.3% after that. Veterans receiving disability compensation, eligible surviving spouses receiving DIC and active-duty Purple Heart recipients pay no fee. You can finance it into the loan or pay it at closing.
What is the max LTV on a VA cash-out refinance?
VA's rules allow a loan of up to 100% of the home's reasonable value, and a financed funding fee must fit inside it; any part of the fee above the limit is paid in cash.
Individual lenders often set lower caps, so the limit you are offered may be below 100%.
How long do I have to wait to do a VA cash-out refinance?
If you are refinancing a VA loan, the new loan can't close until 210 days after the first payment was due and six monthly payments have been made, whichever is later.
Refinancing a conventional or FHA loan into VA has no such waiting period, though lenders may add their own.
Can I do a VA cash-out refinance on a conventional or FHA loan?
Yes. A VA cash-out can replace any mortgage, not only a VA loan, as long as you have a Certificate of Eligibility, live in the home and qualify on credit and income.
It is the usual way to move a conventional or FHA loan into the VA program and drop its mortgage insurance.
What credit score do I need for a VA cash-out refinance?
VA sets no minimum score, but lenders do, and many look for about 620 or higher. They also apply VA's residual-income test and a debt-to-income guideline near 41%.
Some lenders accept lower scores, usually at a higher rate or with tighter limits on how much you can borrow.
Are VA cash-out refinance rates higher than conventional rates?
Usually not. In 2025, the median VA cash-out refinance carried 6.25%, against 6.88% for conventional cash-out loans. Your own rate depends on credit, loan-to-value and lender, and cash-out loans can price a little above a refinance that takes no cash.
Is a VA cash-out refinance a good idea?
It can be when your current rate is at or above today's and you need a large sum.
If your rate is well below today's, keeping it and borrowing the cash as a home equity loan usually costs less, because the new rate would otherwise apply to your whole balance. Price both before deciding.
Does a VA cash-out refinance require an appraisal?
Yes. The lender orders a VA appraisal to set the home's reasonable value, and that value caps how much you can borrow. If it comes in low, the cash you can take shrinks, or the loan may not work at all. A streamline IRRRL, by contrast, takes no cash out.
Which lenders do the most VA cash-out refinances?
In 2025 HMDA data, United Wholesale Mortgage made the most VA cash-out refinances, about 16% of all of them, and the three largest lenders together made 39%.
Volume says nothing about price, so check each lender's median rate and closing costs in the table above.
This guide is general information, not a lending decision. Program rules and dollar limits change — verify current figures with a licensed lender and confirm licensing at NMLS Consumer Access. See all loan types.
Nothing matches that. Try “refinance”, “FHA”, “Texas”, “Rocket” or “PMI”.