There is no single equity percentage that applies to every cash-out refinance. If a particular scenario allows a maximum total LTV of X%, the homeowner generally must retain at least 100% − X% in property equity before accounting for closing costs and other program requirements.
Start with LTV, not a dollar amount.
Loan-to-value compares the loan balance with the supported property value. In a cash-out refinance, the new first mortgage must generally stay within the applicable program's maximum LTV, and subordinate liens may affect the combined loan-to-value calculation.
Potential gross headroom = (supported property value × assumed maximum LTV) − existing secured liensThe maximum LTV is not universal. It can change based on occupancy, property type, loan program, loan amount, credit profile and other underwriting factors.
Example: why home value and lien balance both matter.
Using a purely illustrative 80% planning ceiling, a $600,000 property with $360,000 of secured liens would show $120,000 of gross headroom before closing costs. At $420,000 of liens, the same property would show only $60,000.
| Illustrative value | Existing secured liens | Current LTV | Gross headroom to illustrative 80% |
|---|---|---|---|
| $600,000 | $300,000 | 50% | $180,000 |
| $600,000 | $360,000 | 60% | $120,000 |
| $600,000 | $420,000 | 70% | $60,000 |
The 80% figure above is an educational assumption for the example, not a program guideline or offer.
Four things reduce the amount that reaches you.
- Closing costs: lender, title, appraisal and other transaction costs can reduce net proceeds.
- Existing liens: first mortgages and applicable subordinate financing must be considered.
- Supported property value: underwriting uses an acceptable valuation method, not simply the homeowner's estimate.
- Program limits: occupancy, loan size, property type and borrower profile can affect the maximum structure.
2026 equity context
ATTOM estimated that 43.3% of mortgaged U.S. residential properties were equity-rich in Q1 2026. Arizona's share was 44.2%. “Equity-rich” in ATTOM's methodology means estimated secured loan balances were no more than 50% of estimated property value. That statistic shows that meaningful homeowner equity remains common, but it does not determine individual cash-out eligibility.
The more important question: how much should you take?
The maximum available amount and the appropriate amount are not necessarily the same. A cash-out refinance replaces the first mortgage, so compare the existing rate, new rate, payment, costs and expected payoff timeline against the specific use of funds.
Estimate available equity on the Arizona Cash-Out Refinance page →