Why lenders treat them differently
A larger loan is a larger risk. Pricing, loan-to-value caps, and mortgage insurance can be stricter on cash-out. This site does not have a separate rate sheet for that difference.
Use the same quoted rate only when the quote was actually for that loan type. Do not paste a rate-and-term quote into a cash-out test and call it comparable.
How to model each one here
Rate-and-term matches the refinance calculator: balance plus the closing costs you enter.
For cash-out, add the cash you would take to the current balance, then run the refinance calculator. Say so when you compare the two results.
| Goal | Balance to enter |
|---|---|
| Lower rate or new term | Current payoff |
| Cash in hand | Payoff plus cash you want |
Calculators
Related guides
Sources
Common questions
Do closing costs make a rate-and-term loan into cash-out?
Not in ordinary speech. Financing the costs increases the balance slightly. Cash-out means receiving additional money.
Which one has the lower payment?
Usually the smaller balance, if the rate and term match. Cash out works against that.