Investment Property Cash-Out
The investment property cash-out is one of the main ways to turn home equity into cash. Here is the 2026 rundown.
How it works
Cash-out on an investment property lets landlords tap rental equity, but lenders cap CLTV tighter (often 70-75%) and charge higher rates than owner-occupied loans. Expect stronger credit, reserve, and documentation requirements. The cash is commonly used to acquire or improve additional properties.
Key things to know
- Combined loan-to-value usually caps near 85% (cash-out refinance at 80%).
- A second lien keeps your first mortgage; a cash-out refinance replaces it.
- Compare the rate type — fixed (home equity loan) vs variable (HELOC).
- Budget for closing costs (often lower or waived on HELOCs).
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Frequently Asked Questions
- What is the investment property cash-out?
- Cash-out on an investment property lets landlords tap rental equity, but lenders cap CLTV tighter (often 70-75%) and charge higher rates than owner-occupied loans. Expect stronger credit, reserve, and documentation requirements. The cash is commonly used to acquire or improve additional properties.
- Will it affect my first mortgage?
- Only a cash-out refinance replaces your first mortgage. A HELOC, home equity loan, or second mortgage sits behind it and leaves that rate alone.