Cash-Out Refinance vs HELOC Calculator

Both let you access home equity — but they work very differently. A cash-out refi replaces your entire mortgage at today’s rate. A HELOC leaves your first mortgage alone and adds a second. This calculator shows which is cheaper for your specific situation.

Your current mortgage

Current mortgage balance

Current mortgage rate

This is the key number — your existing rate

Remaining term (years)

Cash you want to access

Cash-out refi rate (today)

HELOC rate

How long you need the money

Loading…

Cash-out refi payment

—

New total monthly payment

Current pmt + HELOC IO

—

Keep existing + add HELOC

Monthly difference

—

Which option costs less

Total cost difference

—

Over selected period

Your current monthly payment—

Cash-out refi: new full payment—

Cash-out refi: payment increase—

HELOC interest-only payment—

Total payment (current + HELOC IO)—

HELOC option payment increase—

Winner over selected period—

The rate trade-off is the key insight: If your existing mortgage rate is below ~5.5%, a cash-out refinance is almost always more expensive than a HELOC — because you are replacing your entire cheap mortgage at today’s higher rate. The HELOC leaves your low-rate mortgage untouched and only adds interest on the new money you borrow.

Frequently Asked Questions

What is a cash-out refinance?

📚 A cash-out refinance replaces your existing mortgage with a new, larger mortgage. The difference between your old balance and the new loan amount is paid to you as cash. For example: you owe $300,000, you refinance to $380,000, and receive $80,000 cash at closing. Your entire mortgage resets at the new loan amount and today’s interest rate.

When does a cash-out refi make sense over a HELOC?

A cash-out refi makes sense when: (1) your current mortgage rate is close to or above today’s rates, so refinancing doesn’t significantly increase your first mortgage cost; (2) you want the simplicity of one loan instead of two; (3) you need a large amount and want the certainty of a fixed rate on the entire balance; (4) your HELOC rate would be significantly higher than the refi rate.