Cash-Out Refinance vs HELOC
Compare three ways to borrow against your home for the same amount of cash, side by side.
How to use ↓Result
Homeowner Calculator · Cash-Out Refinance vs HELOC · homeowncalculator.com
Estimate only, based on your inputs. It may be inaccurate and is not financial advice. Confirm every figure with your lender before you decide.
Payments are rounded up to the next cent, so they can differ from lender documents by a cent.
How to use
- Enter the cash you need, your home value and your current mortgage.
- Enter the rate, term and costs for the cash-out refinance.
- Enter the HELOC and the home equity loan terms.
- Press Calculate to compare all three.
Three ways to use home equity
A cash-out refinance replaces your mortgage with a bigger one, so the new rate applies to the whole balance. A HELOC and a home equity loan are added on top of your mortgage, which keeps its current rate.
The table counts your current mortgage payment in every column, so the payments are the total on all home loans. Total interest is counted until each set of loans is paid off, and the periods differ, so read it as a guide rather than an exact like-for-like figure.
All rates and costs are yours to enter and the loan-to-value limit is your setting. HELOC rates usually change, and the HELOC payment is interest only until the draw period ends.
Worked example
A home worth $450,000 with $250,000 owed at 4% (25 years left), and $50,000 needed. A cash-out refinance at 6.75% for 30 years with $8,000 of costs added to the loan gives a payment of $1,997.69 in place of today's $1,319.60. A HELOC at 8.5% adds $354.17 interest only to today's payment ($1,673.77 in all), rising to $1,753.52 in repayment. A home equity loan at 8% over 15 years adds $477.83 ($1,797.43 in all).
Total interest on all home loans is $411,159.63 with the refinance, $242,511.86 with the HELOC and $181,884.10 with the home equity loan. They run for different lengths of time. Example rates only.
FAQ
Why does the cash-out column show one payment?
A cash-out refinance replaces your current mortgage, so it is the only home loan payment. The other two are added to your existing mortgage payment.
Why are the total interest figures hard to compare?
Each set of loans is counted until it is paid off, and the periods differ. A longer period means more months of interest.
Where do the costs go?
Closing costs for the cash-out refinance are added to the new loan. The HELOC and home equity loan costs are shown as paid in cash.
Does this recommend one?
No. It lines up the numbers you enter. Rates, fees and eligibility come from your lender.