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HELOC vs. Cash-Out Refinance Calculator — Which Costs Less to Tap Equity?

Pull the same amount of cash from your home two ways and compare them: a HELOC layered on top of your current mortgage, or a cash-out refinance that replaces the whole loan. See the monthly payment and the real cost of giving up a low first-mortgage rate.

Quick answer: A HELOC keeps your first mortgage intact, while a cash-out refinance replaces it. If your current mortgage rate is low, keeping it and adding a HELOC may cost less.

HELOC Path — Total Monthly Payment
$1,922You keep your current mortgage and add a HELOC payment on top
HELOC Path — Total Monthly Payment
$1,922You keep your current mortgage and add a HELOC payment on top
Your Current Mortgage Payment
$1,402Principal and interest on the loan you have today
Cash-Out Refi Path — New Monthly Payment
$2,187One new 30-year loan covering the old balance, the cash, and costs
Monthly Difference — Refi minus HELOC Path
$265Positive means the cash-out refi costs more per month
Rate Increase on Your Existing Balance
3.00%A cash-out refi reprices your whole mortgage, not just the new cash
Extra Lifetime Interest From Repricing the Old Balance
$216,601The hidden cost of moving your existing balance to today's rate
HELOC Path — Total Interest on the New Cash
$64,967Interest on the HELOC only — your first mortgage is untouched
Diagnostic

Over the loan term, the lower-cost option saves you $216,601.

The right choice depends on how long you stay in the home — run the refi breakeven calculator to see your crossover point.

Compare HELOC rates
What to do next

See current HELOC and refinance rates

Your action plan
  1. 1

    Compare the leading option against your current setup

    Compare tapping equity with a HELOC layered on your current mortgage against a cash-out refinance that replaces the whole loan at today's rate.

  2. 2

    Compare the result against current market-rate options

    Assumptions change the answer, especially when rates, taxes, or timing matter.

  3. 3

    Save the result to Money Map or use the linked next action

    Turn the result into a prioritized action instead of treating it as a one-off number.

See current HELOC and refinance rates

This is an educational estimate, not tax, legal, investment, or lending advice. Tax rules, rates, and eligibility change and depend on your full situation. Confirm with a qualified professional or the provider before acting.

Calculator action path

Turn this result into a decision

Every SwitchWize calculator connects to a product comparison, rate context, guidance, alerts, and Money Map.

Rate authority hub
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Rate Trend
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Guide
HELOC vs Cash Out Refi: Which Taps Your Equity Smarter?HELOC vs cash out refi: compare rates, costs, and monthly payments to decide which home equity option saves you more. Decision framework and scenarios inside.
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Today's HELOC rates

Reviewed Jul 6, 2026 · Methodology

See all →
SoFi
Checked Jul 2, 2026
6.62%APR
Get Rate
Bank of America
Checked Jul 6, 2026
11.80%APR
Get Rate
B
BMO
Checked Jul 6, 2026
11.80%APR
Get Rate

Rates shown are representative APRs for illustrative purposes. Actual rates vary significantly by credit score, loan amount, down payment, points paid, property type, state, and lender underwriting. Verify current rates directly with each lender before applying. Ranked using the SwitchWize methodology. SwitchWize may earn a referral fee if you proceed through a link above. Learn more

Frequently Asked Questions

Everything you need to know.

What is the difference between a HELOC and a cash-out refinance?
A HELOC is a second loan that sits on top of your existing mortgage — your original loan and its rate stay in place, and you borrow against your equity separately. A cash-out refinance replaces your entire mortgage with one new, larger loan at today's rate. The HELOC keeps your old rate; the refinance gives it up.
Why does my current mortgage rate matter so much?
A cash-out refinance reprices your whole balance, not just the cash you take out. If your current rate is well below today's market rate, the extra interest on your existing balance — moved from your old rate to today's rate — can cost far more than the cash you are borrowing. The calculator shows this as a separate line so the hidden cost is visible.
When does a cash-out refinance still make sense?
A cash-out refinance can make sense if your current rate is at or above today's rates, if you want a single payment instead of two, or if you need a very large sum where the HELOC's variable rate feels risky. When your existing rate is far below market, a HELOC usually wins on total cost.
Which option has lower closing costs?
A cash-out refinance typically carries closing costs of 2–5% of the new loan amount. A HELOC usually has much lower closing costs, and some lenders charge none. The calculator lets you enter the refinance closing costs directly so they are reflected in the comparison.
Is a HELOC rate fixed?
No. A HELOC rate is variable — tied to the prime rate, it moves when the Fed changes rates. A cash-out refinance into a fixed-rate mortgage locks your rate. The calculator holds the HELOC rate constant; in reality it can rise or fall over the life of the line. This is an estimate, not financial advice.
Is the HELOC vs. Cash-Out Refinance Calculator — Which Costs Less to Tap Equity? free to use?
Yes. SwitchWize calculators are free, and you do not need an account to run scenarios or view the result.
Does using the HELOC vs. Cash-Out Refinance Calculator — Which Costs Less to Tap Equity? affect my credit score?
No. Using a calculator does not trigger a credit check. A credit impact can occur only if you apply directly with a lender, card issuer, or provider.
Are the results personalized financial advice?
No. Calculator outputs are educational estimates based on the inputs you enter. Review assumptions and confirm terms directly with providers before making a financial decision.
What should I do after seeing the result?
Use the recommendation module on this page to see current heloc and refinance rates, or run Money Map to compare this home & mortgage decision with your other opportunities.
How does SwitchWize choose related offers?
Related offers are matched by the calculator surface (heloc) and ranked using SwitchWize data such as rate, fees, trust signals, product fit, and switching friction. Paid relationships do not change organic ranking order.
How fresh are the rates and offers shown?
Rate and offer data is reviewed on a recurring cadence and every offer module shows review context or links to the methodology and disclosure pages.
Where can I see the ranking methodology?
The SwitchWize methodology page explains how rate freshness, editorial review, affiliate disclosure, and category ranking factors work.
Can Money Map use this result?
Yes. Money Map is the broader diagnostic path: it compares savings, mortgage, cards, and debt so you can see whether this calculator result is your highest-impact next move.

Why This Matters

The decision turns on one number: your current mortgage rate. A HELOC leaves your existing first mortgage and its rate completely untouched — it adds a second payment that charges interest only on the cash you draw. A cash-out refinance replaces your entire mortgage at today's rate, so if you locked in a low rate years ago, a refinance reprices your whole balance, not just the new money. With 30-year rates stuck in the mid-6% range and millions of homeowners holding sub-4% mortgages, that repricing penalty is often far larger than the headline refinance rate suggests.

How to Use It

  1. 1Enter your current mortgage balance, rate, and years remaining
  2. 2Enter the amount of cash you want to borrow
  3. 3Set the HELOC rate and repayment term, and today's cash-out refinance rate
  4. 4Add the refinance closing costs so the comparison is honest
  5. 5Compare the total monthly payment of each path and the lifetime cost of repricing your old balance
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HELOC vs. Home Equity Loan CalculatorHELOC Payment CalculatorRefinance Savings Calculator
See current HELOC and refinance rates