HELOC vs Cash-Out Refinance Calculator

Best for: Refinance

Compare a HELOC against a cash-out refinance to see which option costs less monthly and over time.

What does this calculator do?

This calculator compares a Home Equity Line of Credit (HELOC) against a cash-out refinance to access your home equity. It shows the monthly payment for each option, the total cost over a comparison period you choose, and which option saves you more.

Who should use it?

Homeowners who want to tap their home equity for cash — renovations, debt consolidation, or major expenses — and need to decide between a HELOC (keeping the existing mortgage) and a cash-out refinance (replacing the mortgage).

What numbers do I need?

Current loan balance, current monthly payment, cash-out amount, HELOC interest rate, HELOC repayment term, refinance interest rate, refinance loan term, estimated closing costs, and the comparison period (years) you want to evaluate.

What should I watch out for?

HELOC rates are typically variable and can increase over time. Cash-out refinances reset your amortization clock, increasing total interest paid even with a lower rate. Closing costs on a cash-out refinance are real money out of pocket or added to the loan. Always compare the total cost, not just the monthly payment.

Current Loan Balance

Current Monthly Payment

Cash-Out Amount

HELOC Interest Rate

HELOC Repayment Term

years

Refinance Interest Rate

Refinance Loan Term

years

Closing Costs

Comparison Period

years

How It Works

1Enter your current loan balance and monthly payment — these stay unchanged with a HELOC.
2Input the cash-out amount you want to access from your home equity.
3Enter the HELOC interest rate and repayment term to calculate the HELOC monthly payment.
4Enter the refinance interest rate, loan term, and closing costs for the cash-out refinance option.
5Choose a comparison period (e.g., 5 or 10 years) to see the total cost of each option over time.
6The calculator compares monthly payments, total cost, and identifies which option saves you more.

Who This Calculator Is For

This calculator is for homeowners who want to access their home equity and need to decide between a HELOC and a cash-out refinance. It is especially useful for comparing the true cost of each option — not just the monthly payment — over a realistic time horizon.

Frequently Asked Questions

What is the difference between a HELOC and a cash-out refinance?

A HELOC is a second lien that sits behind your existing mortgage — you keep your current loan and add a line of credit. A cash-out refinance replaces your entire mortgage with a new, larger loan and you receive the difference as cash.

Is a HELOC rate fixed or variable?

Most HELOCs have a variable interest rate tied to the prime rate, which means your payment can increase over time. Some lenders offer fixed-rate HELOC options or rate-lock features. Always confirm the rate structure with your lender.

Does a cash-out refinance have closing costs?

Yes. Cash-out refinances typically have closing costs of 2-5% of the loan amount, similar to a purchase mortgage. HELOCs may have lower or no closing costs, which can be a deciding factor if the total cost difference is small.

Which option is better: HELOC or cash-out refinance?

It depends on your situation. A HELOC keeps your existing mortgage rate and adds a smaller second payment, which may be cheaper monthly. A cash-out refinance replaces your mortgage at a new rate, which may save money long-term if rates have dropped. Use the comparison period to see the total cost difference over time.

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Calculator results are estimates for educational and informational purposes only. They are not financial, legal, tax, or lending advice and do not represent a loan approval or commitment to lend. Actual terms vary based on lender, borrower profile, documentation, market conditions, and underwriting.