Comprehensive Guide
Learn more in our Loans & Mortgage Guide.
How it works
heloc vs cash-out refinance calculator takes your inputs and produces heloc: total cost, refi: total cost, heloc: estimated monthly payment, refi: monthly payment, lower cost option. Compare HELOC and cash-out refinance to access home equity — see which option costs less. You provide 6 inputs: Available home equity (currency, in dollars) (default: 150000 dollars); Amount needed (currency, in dollars) (default: 50000 dollars); HELOC rate (%) (percent, in percent) (default: 8.5 percent); HELOC draw + repayment period (years) (number) (default: 20); Cash-out refi rate (%) (percent, in percent) (default: 7 percent); Refi term (years) (number) (default: 30). The calculator returns 5 outputs: HELOC: total cost (the primary result); Refi: total cost (a secondary output); HELOC: estimated monthly payment (a secondary output); Refi: monthly payment (a secondary output); Lower cost option (a secondary output). Loans and mortgages are amortized instruments where the split between interest and principal shifts every month. Understanding the total cost of borrowing — not just the monthly payment — is the difference between a sustainable debt load and one that erodes your net worth over time. This calculator reveals the full amortization picture. The underlying formula: HELOC cost = Amount drawn × Rate × Years (variable). Refi cost = Total payments over term. With the default values, heloc: total cost is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Formula
HELOC cost = Amount drawn × Rate × Years (variable). Refi cost = Total payments over term.
Tips
- HELOCs are better for: ongoing/variable needs, lower total amount, shorter payoff timeline.
- Cash-out refi is better for: fixed amount needed, long repayment period, prefer fixed rate.
- HELOC rates are variable — they can rise significantly during the repayment period.
- Check if your current mortgage rate is below current rates before refinancing.
Frequently asked questions
When is a HELOC better than a cash-out refi?
When you need flexible access to funds (home renovations in phases), when your current mortgage rate is low (do not want to refinance it), or when you need a smaller amount ($25K–75K) for a shorter period.
What are the risks of a HELOC?
Variable rates can increase significantly (rates doubled from 2021–2024). Monthly payments can become unaffordable. Your home is collateral — failure to pay can result in foreclosure.
How accurate are the calculator results?
The math is exact — the same formulas a financial professional would use by hand. The precision of the output depends entirely on how realistic your inputs are. Use your actual numbers rather than estimates when possible. The defaults are reasonable starting points, but your real income, rates, and timeline will produce a different result.