Cash-out 95% Mortgage in 2025: How to Unlock Maximum Equity from Your Home

Posted on April 29, 2025 by Anthony Bird - Buying a Home, Mortgage Tips

Did you know that with a Cash-out 95% Mortgage, you can access up to 95% of your home’s value? That’s right! With our portfolio cash-out loan, homeowners can tap into their home’s equity and get cash up to 95% of the home’s value, making it one of the most powerful financial tools available in 2025.

Whether you’re tackling high-interest debt, funding a major renovation, or launching a business, this approach offers extraordinary leverage. As with any mortgage, there are strict qualifications, and lender guidelines you’ll need to understand thoroughly.

Let’s break it all down with real-world examples, expert insights, and up-to-date regulatory considerations. If you’ve ever wondered whether this type of mortgage refinance is right for you, you’re in the right place!

What Is a Cash-out 95% Mortgage?

A cash-out 95% mortgage is a type of refinance loan that allows homeowners to access up to 95% of their home’s value in cash. Unlike a traditional refinance that might just get you a better interest rate or loan term, a cash-out refinance lets you borrow more than you owe on your current mortgage—and pocket the difference in cash.

So how does the 95% figure work? This percentage refers to the loan-to-value (LTV) ratio. If your house is worth $300,000, a 95% LTV means you could borrow up to $285,000. If you only owe $200,000 on your current mortgage, that means you could cash out $85,000 (before closing costs).

This is different from more conservative refinancing options. For example:

• 80% LTV refinance: Conventional loan allow you to access up to 80% of your home’s value
• 90% LTV refinance: Some non-qm lenders may allow you to Borrow up to 90% but at high rates.
• 95% LTV refinance: Pushes the borrowing limit to near maximum equity with low rates!

Understanding the relationship between your home’s equity (your property’s value minus what you owe) and the loan amount is key. A 95% cash-out essentially leaves you with very little equity remaining in the home—only 5%—which makes it a higher-risk product both for borrowers and lenders.

Who Qualifies for a 95% Cash-Out Refinance?

Not everyone can qualify for a 95% cash-out mortgage. Due to the high LTV, lenders consider these loans riskier and are stricter about who can access them.

We have flexible credit score consideration with this program available to hose with credit scores down to a 660! A healthy debt-to-income (DTI) ratio is also essential, typically not exceeding 45%, though some with 2 months in reserves (or other compensating factors) we can go up to a 50% DTI.

Even though you’re borrowing up to 95%, you still need to have a small amount of equity in your home. This means you probably need to have owned the property for at least a couple of years and have made consistent mortgage payments. If you initially put a large down payment when you bought the home, then you may also have enough equity to consider this mortgage option. Finally, proof of stable income, employment history, and relevant documentation (pay stubs, W-2s, tax returns, asset statements) is required during the application process.

Property Requirements for 95% Cash-out Mortgage:

The property type is limited to the following requirements: 

• 1-unit detached Single Family Residential homes
• Fannie Mae warrantable attached and detached condominiums and PUDs
• No manufactured homes.
• No co-ops or leaseholds.
• Primary Residences only.

Pros and Cons of a 95% Cash-out Mortgage

This type of loan has some significant upside—and some trade-offs.

Pros:

• You get access to nearly all your home equity in cash, which can be used for major expenses like renovations, college tuition, medical bills, or debt consolidation.
• Compared to personal loans or credit cards, interest rates on cash-out refinancing are generally lower.
• You might reduce your total overall monthly outgoing payments if you use the funds to eliminate high-interest debts.

Cons:

• Mortgage insurance is often required when borrowing more than 85% of your home’s value, which adds to monthly costs.
• Your monthly mortgage bill will likely rise since you’re borrowing a larger amount.
• You’ll have limited equity left in your home, which can impact future borrowing power or resale flexibility.

Is a 95% LTV Cash-Out Mortgage Available in 2025?

In recent years, lending standards tightened in the wake of the COVID-19 pandemic and rising interest rates. As of 2025, your ability to find a 95% cash-out refinance speak with a licensed mortgage broker at Riverbank to determine eligibility.

Government-backed loans like FHA Loans and VA Loans do not typically offer 95% cash-out options (though VA loans may go up to 100% LTV). For conventional loans, high-LTV cash-outs are offered by select lenders under certain programs, but availability may be limited and dependent on strong borrower credentials.

Most mortgage companies, banks and credit unions are unable to offer cash-out refinancing at a high loan to value like our Cash-out 95% Mortgage. Most are limited to the conventional guidelines of 80% max cash-out.

Alternatives to Cash-out 95% Mortgage

If a 95% cash-out refinance isn’t the right fit or not available to you, there are other ways to tap into your home’s value. Some people may be lucky enough to have locked in a 2% or 3% mortgage rate during the COVID pandemic. If you have that low of a rate you may also want to consider alternatives such as:

• Home Equity Loans and HELOCs (Home Equity Lines of Credit): These are second mortgages based on your equity and can offer flexible borrowing options without changing your current first mortgage.
• Standard Cash-Out Refinance: These typically allow you to borrow up to 80% of your home’s value with lower risk and potentially lower rates.
• Second Mortgages: These include home equity loans with fixed payments similar to an installment loan.
• Personal or Unsecured Loans: Great for smaller needs but come with higher interest rates than secured financing.

How to Apply for a Cash-out 95% Mortgage

Applying for a cash-out refinance with such a high LTV involves several key steps:

1. Check your credit: Ensure your credit score meets the lender minimum.
2. Calculate equity: Determine if your current loan balance allows enough room for a 95% LTV cash-out.
3. Talk to a Riverbank Loan Officer: Review options and confirm that the 95% cash-out mortgage is your best fit.
4. Submit an application: You’ll need documentation like:
   • Recent pay stubs
   • W-2s or tax returns
   • Bank statements
   • Mortgage statement
   • Property appraisal may be required during the underwriting process.
5. Underwriting and appraisal: Lenders verify your financials and assess the home’s current market value.
6. Closing: The final step is to schedule a closing to sign documentation for your new loan.

The entire process—from application to funding—typically takes 15–30 days.

Real-Life Examples and Use Cases

To understand how people use 95% cash-out mortgages, here are a few real-life scenarios:

• Student Loan Payoff: A homeowner with strong equity uses a 95% cash-out refinance to pay off $50,000 in student debt, saving thousands in interest over time.
• Home Renovation: A growing family uses the equity to upgrade their kitchen and bathrooms, boosting their home’s market value.
• New Business Launch: An entrepreneur refinances their home to pull $70,000 in startup capital for a freelance venture—without needing investor funding.
• Consolidating High Interest Credit Cards: With credit cards being interest only at rates as high as 30%, consolidating your debt into a low rate mortgage save you thousands in interest and reduce your monthly expenses. 

Tips to Maximize Your Refinance Value

Here are some tips to keep in mind when considering a cash-out refinance:

• Know your home’s value: Accurate estimates help you avoid surprises during the appraisal process.
• Compare Loan Options: Rates, fees, and terms vary widely—don’t settle for the first offer.
• Use funds wisely: Reinvest cash into value-adding expenses (like renovations or debt relief) rather than lifestyle inflation.
• Look for Refinance Opportunities: Cash-out mortgages may have a slightly higher interest rate. If rates drop in the future, reach back out to your loan officer to ask if you are eligible for a rate drop.

Frequently Asked Questions (FAQs)

Is 95% cash-out refinancing risky?
Yes, it’s riskier than lower-LTV options. You have less equity cushion, meaning it’s easier to become “underwater” if home values decrease.

Can I refinance again after taking out equity?
Yes, but your options may be limited unless your home appreciates. Most lenders require significant equity remaining. Another option would be to do a rate and term refinance to lower your rate in the future if rates drop.

Will my property taxes change?
No. Refinancing your mortgage will not affect your property taxes. If an appraisal is required, it is solely for the purpose of the lender approving your mortgage and is not public information.

How long should I stay in the home after refinancing?
Ideally, a couple of years. You’ll want to recoup closing costs and maximize savings. Plan to stay at least long enough to break even.

Is this option available for self-employed borrowers?
Yes, but documentation is more intensive. Be ready with tax returns, profit/loss statements, and possibly a CPA letter to verify income stability.

A Cash-out 95% Mortgage in 2025 is a powerful tool for homeowners looking to access significant equity. Evaluate your financial goals, creditworthiness, and risk appetite before pursuing this option. With careful planning with your mortgage broker, you can unlock your home’s full potential and take control of your financial future. Ready to get started? Talk to an experienced mortgage advisor today to see if this strategy fits your needs!