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HELOC vs Cash-Out Refi Calculator

Cash-out refi resets your entire mortgage to current market rate. HELOC leaves the first mortgage untouched and adds a second at potentially higher variable rate. Which wins depends on your current rate. This calculator compares.

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Lower lifetime cost path

HELOC

Lifetime savings

$220,356

Cash-out refi lifetime cost

$731,115

HELOC path lifetime cost

$510,759

Current mortgage lifetime (if kept)

$420,524

How the math works

$280K at 3.5% + $60K HELOC at 8.75% = $660K lifetime. Cash-out refi at 7% with closing = $750K. HELOC wins by $90K because you preserve the 3.5% first-mortgage rate.

Almost always HELOC wins when current rate is > 2% below current market. Only refi if rates have fallen meaningfully or you want rate certainty.

How to Use

  1. Enter current mortgage balance and rate.
  2. Enter cash-out refi rate, HELOC rate, and cash needed.
  3. See lifetime cost under each path.

Frequently Asked Questions

When does HELOC win?

When current mortgage rate is lower than cash-out refi rate. Locked in at 3% and current cash-out is 7%? HELOC at 8.5% still beats trashing your 3% on the first mortgage.

When does cash-out win?

When your current mortgage rate is near or higher than cash-out rate. Consolidates into one payment at likely lower lifetime cost. Also simpler — one payment, one due date.

What about variable rate risk?

HELOCs are variable. If rates rise, HELOC payment rises. Cash-out refi is fixed (usually) — rate certainty over 30 years. Factor in your rate outlook and risk tolerance.

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