Calculators
HELOC vs Cash-out Refinance Calculator
Compare borrowing cash with a HELOC on top of your existing mortgage against a cash-out refinance of the whole loan.
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The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Choosing how to fund a renovation
- Debt consolidation planning
- Comparing lender offers
- Protecting a low existing mortgage rate
About this tool
What the HELOC vs Cash-out Refinance Calculator does
You can borrow against home equity by adding a HELOC to your existing mortgage, or by replacing the mortgage with a bigger cash-out refinance. A low-rate existing mortgage often favours the HELOC; a high existing rate can favour refinancing. This calculator compares the monthly payments and total interest of both routes.
Formula
- Option A = current mortgage payment + amortised HELOC payment
- Option B = payment on (balance + cash needed) × (1 + closing costs) at the refinance rate
- Totals compare interest and financed costs over each loan’s life
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Cash needed | $60,000 |
| Current mortgage balance | $280,000 |
| Current mortgage rate | 3.5% |
| Years remaining on mortgage | 25 |
| HELOC rate | 8.5% |
| HELOC repayment years | 20 |
| Cash-out refinance rate | 6.75% |
| Refinance term | 30 |
| Refinance closing costs | 2.5% |
| Result | Value |
|---|---|
| Lower total interest and costs | HELOC |
| Monthly: mortgage + HELOC | $1,922.44 |
| Monthly: cash-out refinance | $2,260.36 |
| Total interest: mortgage + HELOC | $205,490 |
| Total interest and costs: refinance | $473,731 |
How to read the result
If your existing mortgage rate is well below today’s rates, refinancing the whole balance to borrow a small amount is usually expensive.
HELOC rates are usually variable; a refinance can lock a fixed rate on everything.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
A HELOC is often better when your current mortgage rate is low; a cash-out refinance can be better when it is high or you want one fixed payment.
Closing costs similar to any refinance, often 2% to 5% of the new loan.
No. It is a separate second loan secured on the home.
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