# Cash-Out Refinance

*Real Estate — Finicade finance glossary*

A cash-out refinance replaces your mortgage with a larger one and hands you the difference in cash, tax-free because it's borrowed money rather than income. It's how equity is extracted without selling, and the engine of the BRRRR strategy. The cost is resetting your loan: a new rate on the entire balance, fresh closing costs, and a higher payment secured against your home.

**Also known as:** cash out refi, equity release, remortgage

**Related terms:** [Refinancing](https://finicade.com/glossary/refinancing), [Home Equity](https://finicade.com/glossary/home-equity), [BRRRR Method](https://finicade.com/glossary/brrrr-method), [HELOC (Home Equity Line of Credit)](https://finicade.com/glossary/heloc), [Loan-to-Value Ratio (LTV)](https://finicade.com/glossary/loan-to-value-ratio)

Source: https://finicade.com/glossary/cash-out-refinance