Finance guide

HELOC vs Cash-Out Refi: What Changes the Cost?

Compare HELOC and cash-out refinance structures, payments, and break-even dynamics using shared assumptions.

Quick answer: HELOC and cash-out refinance trade payment stability, rate sensitivity, and closing-cost structure differently.

Intent: heloc vs cash out refinance which is better

How to run the numbers

Set a common draw amount and compare both structures side by side.
Review monthly payment estimates and five-year interest assumptions.
Use break-even output only as a planning estimate, not a lender quote.

Common mistakes

Variable HELOC rates can materially change projected costs.
Cash-out refinancing may reset term length and total loan interest.
Ignoring line fees, points, and underwriting differences can distort comparison.

Calculators to open now

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Primary

HELOC vs Cash-Out Refi

Compare monthly payment and interest tradeoffs between HELOC and cash-out refinance.

Finance / Refi / Equity

HELOC Payment

Estimate HELOC monthly payment during draw and repayment with interest-only or amortized draw options.

Cash-Out Refi

Estimate new loan amount, monthly P&I, net cash received, and 5-year refinance cost impact.

Home Equity

Estimate your current equity, available borrowing room at max LTV, and current loan-to-value ratio.

Related guides

When Does PMI Drop Off?

Estimate PMI drop-off timing and total PMI paid with optional extra principal assumptions.

When Does Refinancing Make Sense?

Compare current loan vs proposed refinance and find the break-even timeline for closing costs.

How Much House Can I Afford?

Use income, debt, rate, and ownership cost assumptions to estimate a realistic home-price ceiling.

How to Read an Amortization Schedule

Understand principal vs interest over time and use amortization outputs to plan prepayments.

FAQs

Is HELOC always cheaper at the start?

It may appear lower during interest-only periods, but cost can rise during repayment or when rates change.

Does cash-out refi always need high closing costs?

Costs vary by lender and loan profile; include all fees to evaluate true break-even.

Can I compare both using one draw amount?

Yes. Keeping the draw amount constant makes tradeoffs easier to interpret.

This calculator provides planning estimates for educational purposes only. Verify all assumptions with licensed professionals before making financial, legal, tax, insurance, or construction decisions.

Want a sequence instead of a single tool? Open Start Here: Refinancing.