Cash Out Refi Margin Calculator

Cash-out refis live on rate spread. This calculator sizes margin.

Cash harvested

Refi rate

Deployment return

Transaction costs

Payback years

Net margin annual

$258,750

Payback months

6 mo

Spread (bps)

575

How the math works

Spread = deployment − refi rate. Net margin = cash × spread. Payback = transaction ÷ annual margin.

Cash-out refi spreads are often narrower than assumed after transaction costs amortize. On $4.5M harvested at 575 bps spread, the net margin of $260k looks attractive — but 12 months of payback amortization means the first year's real contribution is closer to $135k. Model both gross and amortized.

How to Use

Enter cash harvested.
Enter refi rate %.
Enter deployment return %.
Enter transaction costs.
Enter payback period years.
Read net margin and payback.

Frequently Asked Questions

Margin threshold?

200-300 bps spread after all costs is the threshold for meaningful outperformance. Below 150 bps: friction eats most of the margin. Above 400 bps: almost always executes. Sweet spot 300-500 bps spread.

Friction costs?

Closing costs 1-3% of new loan. Defeasance/YM if applicable. Higher debt service ongoing. Stress on DSCR/LTV covenants. Each friction must be paid before margin accrues.

Liquidity vs arbitrage?

Cash-out refi can be executed for arbitrage (spread) or liquidity (optionality). Liquidity value hard to quantify but real. Don't force arbitrage math to justify what is really a liquidity move — different decisions.