Rental Property Refinance Calculator

Enter your current loan, the new terms you're considering, and your property's monthly figures. The calculator shows you five numbers that actually determine whether a refinance makes sense: payment change, closing-cost break-even, cash-out available, cash flow before and after, and DSCR before and after.

When Does Refinancing an Investment Property Make Sense?

The refinance math for rental properties differs from a primary residence in three important ways: lenders require lower LTV (typically 75% for cash-out vs. 80–95% for owner-occupied), rates run 0.5–0.75% above owner-occupied loans, and the break-even must account for cash flow — not just the payment reduction. With those constraints in mind, refinancing tends to make sense in five scenarios:

• Rate drop sufficient to break even within your hold horizon. There's no universal "1% rule" — the right threshold depends on closing costs and your planned hold period. If you're $6,000 in closing costs and saving $250/month, that's a 24-month break-even. If you're planning to hold for 5+ years, that's a clear yes. If you might sell or do a 1031 in 18 months, it's a borderline case at best.
• Flipping negative to positive cash flow. Properties bought at 7–8% rates in 2022–2023 often run slightly negative cash flow. A rate reduction that pushes cash flow positive changes how portfolio lenders evaluate your ability to qualify for additional loans — negative cash flow on existing properties drags against your DSCR on the next application.
• Cash-out to fund a next acquisition. Extracting equity from a stabilized rental to fund a down payment on the next deal is the core engine of the BRRRR strategy. The proceeds are completely tax-free — no gain recognized, depreciation basis unchanged. See the full mechanics in our cash-out refinance tax guide.
• Switching to a DSCR loan for LLC ownership. Conventional Fannie/Freddie loans require a personal borrower — properties held in an LLC can't use them. Refinancing from a conventional loan into a DSCR loan that closes in the LLC's name gives you entity protection at the cost of a slightly higher rate. Many investors find the asset protection worth it once the portfolio reaches scale. See our LLC and entity structure guide for the full analysis.
• Shortening the term to accelerate paydown before an exit. Moving from 30 to 15 years increases the monthly payment but builds equity significantly faster. If you're planning to sell or do a 1031 exchange in 8–10 years and want a lower remaining mortgage balance going into that transaction, a shorter-term refi can make sense — particularly if you can absorb the higher payment from current cash flow.

Investment Property Refinance Requirements in 2026

Non-owner-occupied (investment property) refinance programs are more restrictive than primary residence programs. Key parameters as of 2026:

Three Tax Points Most Investors Get Wrong on a Refi

Cash-out proceeds are 100% tax-free

Pulling $80,000 in equity from a rental via cash-out refi does not trigger any tax. There's no realization event under IRC §61 — a loan is not income because you have a corresponding repayment obligation. Your depreciation basis stays the same, and your mortgage interest deduction on Schedule E grows as the balance increases. The only exception is debt forgiveness: if a lender forgives rental property debt (foreclosure, short sale), IRC §108 triggers cancellation-of-debt income — unlike a primary residence where exclusions may apply.

Refinance points must be amortized — not immediately deducted

Origination points paid on a rental property refinance are not deductible in the year paid. They must be amortized over the loan term on Schedule E. (Purchase mortgage points can sometimes be deducted immediately — this exception does not apply to refis.) If you refinance again before the term ends, the remaining unamortized balance becomes fully deductible in the year of the new refi.

Your depreciation schedule is unaffected by refinancing

A cash-out refi that pulls $100,000 from a rental has no effect on your depreciation calculation. The building's depreciable basis was set at acquisition and changes only through improvements and prior depreciation deductions — not through financing events. This surprises many investors who expect equity extraction to somehow affect their cost basis.

Related tools: DSCR Loan Calculator · Rental Cash Flow Calculator · Hold vs. Sell Calculator · BRRRR Deal Analyzer

1. IRS Publication 527 — Residential Rental Property. Covers Schedule E deductions including mortgage interest, the treatment of refinance points as amortizable costs (not immediately deductible), and the depreciation basis rules that are unaffected by financing events.
2. Fannie Mae Selling Guide. Documents LTV caps, credit score minimums, reserve requirements, and personal borrower requirements for conventional investment property refinances — the framework that DSCR loans bypass for qualification.
3. IRS Publication 936 — Home Mortgage Interest Deduction. Defines the qualified home loan interest cap ($750,000 MFJ for primary residences post-2017 TCJA) — and clarifies that this cap does not apply to investment property Schedule E interest, which is fully deductible regardless of loan size.
4. CFPB — What is a Non-Qualified Mortgage? Explains the regulatory framework for non-QM DSCR investor loan products — the type used when refinancing into an LLC or qualifying on property income alone.

Refinance requirements and rate premiums reflect typical lender standards as of 2026. Specific LTV limits, credit minimums, and pricing vary by lender, product, property type, and market conditions. Loan decisions should be made with a licensed mortgage professional. Values verified June 2026. No regulatory tax values used in this calculator.