HELOC vs Cash-out Refinance
Two ways to pull equity from your home. The right choice depends on your current rate, how long you need the money, and your tolerance for an adjustable payment.
Your situation
Illustrative example rate. Not an available or quoted rate.
How long until you sell or refinance
Illustrative example rate. Not an available or quoted rate.
Illustrative example rate. Not an available or quoted rate.
Over 10 years
Over 10 years, the HELOC path costs about $41,225 less in this scenario. Remember, a HELOC rate typically adjusts with the market, so a low starting HELOC rate is not promised for the full term.
HELOC
Keeps your existing first mortgage in place. You pay interest-only on the HELOC during the draw period, then the line amortizes. Rates on HELOCs typically adjust with the market.
Cash-out Refinance
Replaces your current first mortgage with a new, larger fixed-rate loan. You give up your current rate but lock in a single fixed payment for the new term.
Want help deciding which path fits?
Get a Mortgage Game Plan: a loan officer walks through your numbers, your timeline, and the trade-offs in plain English.
Get Your Game PlanWant a plain-English walkthrough? Cash-out refinance vs HELOC decision guide.
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Frequently asked questions
When does a HELOC beat a cash-out refinance?
When does a cash-out refinance beat a HELOC?
Related glossary terms
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