Cash Released
Calculate net cash released on a refinance and whether it is productively deployed.
Introduction
Who this is for: Investors releasing equity to fund the next purchase.
Why it matters: Released equity is not free money — it is debt with a certain cost against an uncertain return. The test is whether the cash earns more than the interest on it.
Typical scenario: A landlord releasing equity from a property that has grown in value, to fund a deposit elsewhere.
- Treating released equity as profit rather than borrowing.
- Forgetting the higher rate often applied to the whole loan at higher LTV.
- Not testing what happens if the redeployed cash underperforms.
Inputs
Refinance
Deployment
Analysis
Refinancing to 75% LTV on a £420,000 property gives a £315,000 loan, releasing £101,500 after costs. That cash costs £5,670 a year in interest and must return at least 5.59% to be worth releasing.
This analysis provides context, not financial advice. Consult a qualified adviser before making investment decisions.
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Live Results
Net Cash Released
£101,500
Annual Cost of Released Cash
£5,670
Expected Annual Return
£9,135
Net Annual Benefit
£3,465