Refinancing is how you pull your capital back out of a deal or lock in better terms, and this free calculator shows you whether it makes sense. Enter your current loan and the new terms, and you will see the new payment and any cash-out proceeds.
A well-timed refinance can return a big chunk of your original investment while you keep the property and its cash flow. Done at the wrong time or the wrong rate, it can also raise your payment and squeeze your coverage. Here is the tool, then what to weigh.
A cash-out refinance, in one line: you replace your existing loan with a larger one and take the difference as tax-deferred cash, as long as the property's value and income support the new loan.
The catch: the new loan has to still pass the lender's LTV and debt coverage tests, and a higher balance or rate means a higher payment, so confirm the deal still cash flows.
How to Use the Refinance Calculator
Enter your current balance and the new loan terms, and the calculator shows the new payment and, for a cash-out, how much you could pull out after paying off the old loan. The cash you take out is not taxed at the time, because it is a loan, not a sale, which is a big part of why investors refinance instead of selling.
The two tests that govern a refinance are the same ones that governed your original loan: loan to value and debt service coverage. A cash-out only works if the property has appreciated or grown its NOI enough to support the larger loan while keeping coverage above the lender's minimum. I cover how commercial financing works here.
Watch: How To Finance Your First Commercial Property
Commercial Refinance FAQ
How does a cash-out refinance work?
You replace your current loan with a larger one and take the difference in cash. The cash is not taxed when you receive it because it is borrowed money, not sale proceeds, though the new loan must still meet the lender's requirements.
When does it make sense to refinance?
Common reasons are pulling out equity after the property has appreciated or grown its NOI, locking in a better rate, or extending the term before a balloon comes due. The new loan needs to still cash flow.
What limits how much I can cash out?
The lender's maximum loan to value and required debt service coverage. Your cash-out is capped by whichever of those two produces the smaller new loan.
Is refinance cash taxable?
No. Because a refinance is a loan and not a sale, the proceeds are not taxed when you receive them, which is why investors often refinance rather than sell to access equity.
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Explore CRE CentralCheck the new loan against the DSCR and LTV calculators, or see all the commercial calculators.