Are Cash-Out Refinance Rates Higher Than Regular Refinance Rates?

Yes — cash-out rates are typically 0.125%–0.5% higher than rate-and-term refinance rates because they carry more risk for the lender.

• What to know: Understand the full cost of a cash-out refinance so you can accurately calculate whether the math works for your Houston rental.
• Houston context: Houston's competitive lending market means rates and fees vary significantly — shopping 3–5 lenders can save you thousands in total borrowing costs.
• Action step: Compare total costs (closing costs + higher monthly payment) against the return you expect to earn on the cash-out proceeds. The spread must be positive.

Bottom Line

Cash-out refinancing costs money — but when the proceeds earn a higher return than the borrowing cost, it accelerates Houston portfolio growth significantly.