The numbers · Refinance timer · Capital
Refinance on a schedule, not on optimism.
The rule: the post-refi loan must clear 1.30 DSCR at 80% occupancy. This tool applies it to your property and tells you the largest cash-out that stays rule-safe.
Inputs
Current property value$320,000
Current loan balance$180,000
Current rate5.50%
New loan LTV75%
New rate7.00%
Monthly rent$2,600
Monthly operating costs$1,000
The rule: refinance when the POST-refi loan clears 1.30 DSCR at 80% occupancy — not your current occupancy, not projected rents. Anything else extends the runway on Year 7 instead of shortening the distance to Year 20.
Before and after the refinance
Cash out
$60k
Old payment /mo
$1k
New payment /mo
$2k
Old cashflow /mo
$578
New cashflow /mo
$3
Stressed DSCR
0.68
Post-refi loan at 80% occupancy — the rule's number
Cash unlocked
$60k
At 75% LTV on today's value
Rule-safe cash-out
$0
The most you can pull and still clear 1.30 stressed (loan ≈ $125k)
The verdict
No. At 0.68 stressed coverage this refinance converts a stable property into a fragile one for $60k of walking-around money. The distance to Year 20 just got longer, not shorter.
Full-occupancy DSCR1.00
New loan$240k
Payment change+$575/mo
Equity remaining$80k