HELOC vs Cash-Out Refinance Calculator
Keep your mortgage and add a HELOC, or replace it with a cash-out refinance. Compare payments, the HELOC payment jump, LTV limits and interest and fees over time.
Borrow the same cash two ways: keep your mortgage and add a HELOC, or replace it with a larger loan. Both are compared on interest and fees, not just the payment.
Your home and current mortgage
The two quotes
Advanced assumptions
- HELOC + current mortgage
- Cash-out refinance
| Years | HELOC + mortgage | Cash-out refinance | Difference |
|---|---|---|---|
| 1 | $14,248 | $30,600 | $16,352 HELOC lower |
| 3 | $41,058 | $73,101 | $32,044 HELOC lower |
| 5 | $66,895 | $114,554 | $47,660 HELOC lower |
| 7 | $91,689 | $154,802 | $63,113 HELOC lower |
| 10 | $126,759 | $212,511 | $85,752 HELOC lower |
| 15 | $177,465 | $299,697 | $122,233 HELOC lower |
| HELOC rate | 5 years | 10 years | Highest payment |
|---|---|---|---|
| 8.500% | $66,895 | $126,759 | $1,772.25 |
| 9.500% (+1) | $69,895 | $132,759 | $1,810.84 |
| 10.500% (+2) | $72,895 | $138,759 | $1,850.59 |
A HELOC rate is variable and the payment can jump when the draw period ends. A cash-out refinance resets your whole mortgage to the new rate and term. Both put your home up as collateral. Interest may or may not be tax deductible; ask a tax professional.
How it works
Both options leave you with the same cash and start out owing the same amount: your current balance plus the cash. Each is then run month by month. The HELOC option keeps your mortgage payment and adds the line (interest-only for the draw period then amortizing, or amortizing from the start). The refinance replaces both with one new loan. The comparison adds payments, the balance still owed and closing costs, then subtracts the starting debt, which leaves the interest and fees you would pay by each year.
Read HELOC vs cash-out refinance for the trade-offs, compare a HELOC with a fixed home equity loan in the HELOC vs home equity loan calculator, and test a rate-and-term refinance in the refinance calculator.
Sources and further reading
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Frequently asked questions
Is a HELOC or a cash-out refinance cheaper?
It depends mostly on your current mortgage rate. A HELOC leaves that rate alone; a cash-out refinance moves your whole balance to the new rate. If your current rate is low, the HELOC often costs less even at a higher rate on the borrowed amount.
Why does the HELOC payment jump?
Many HELOCs charge interest only during the draw period. When repayment starts, the balance is paid off over the remaining years, so the payment can rise sharply. The calculator shows the highest payment.
What if HELOC rates go up?
Most HELOC rates are variable. The rate table reruns the comparison at one and two points above your quote to show the risk. It is an illustration, not a forecast.
How much can I borrow?
Lenders cap the combined loan-to-value for a HELOC and the loan-to-value for a cash-out refinance, and the limits vary by lender and program. Enter the limits from your quotes.
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