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Home / Calculators / HELOC vs Home Equity Loan vs Cash-Out Refinance Calculator

HELOC vs Home Equity Loan vs Cash-Out Refinance Calculator

Determine whether to replace your entire mortgage with a Cash-Out Refinance or preserve your low locked-in first mortgage (2% to 3.5%) by taking a HELOC or fixed-rate Home Equity Loan. Computes your blended effective interest rate, Combined LTV (CLTV), and itemized 5-year and 10-year interest costs.

MORTGAGE & HOME EQUITY (US)

HELOC vs Home Equity Loan vs Cash-Out Refinance

Calculate whether to replace your entire mortgage (and lose your low locked-in rate) or keep your 1st mortgage and secure a 2nd lien home equity line.

11. Current Property & 1st Mortgage

$

Current appraised value (e.g., Zestimate / recent appraisal)

$
%

e.g., 2.75% to 3.5% if originated in 2020–2021

22. Cash Needed (Equity Withdrawal)

$

For ADU additions, renovations, debt consolidation, or investing

33. Market Option Assumptions

Cash-Out Refinance (1ª Hipoteca Nova)
HELOC (Linha de Crédito 2º Grau)
Home Equity Loan (2ª Hipoteca Fixa)
Combined Loan-to-Value (CLTV)
64.6%
CLTV Seguro (≤ 80%)
Effective Blended Interest Rate

By preserving your ultra-low 1st mortgage rate, your total combined borrowing cost is far lower than refinancing the entire sum:

Cash-Out Refi
6.85%
HELOC Blended
4.50%
2nd Loan Blended
4.44%

Option A: Cash-Out Refi

Replaces 100% of your debt at today's market rates

6.85% Fixa
Total Monthly Payment (P&I)
$2.821/mês
Estimated Upfront Closing Costs
$10.500
Total Interest Paid in 5 Years
$143.334
Total Interest Paid in 10 Years
$276.115

Option B: HELOC (2nd Lien)

Preserves 1st mortgage; revolving variable line

8.5% Variável
Total Monthly Payment (P&I)
$2.310/mês
($1602 + $708)
Estimated Upfront Closing Costs
$500
Total Interest Paid in 5 Years
$90.785
Total Interest Paid in 10 Years
$173.145
Economiza $102.970 vs Refi

Option C: Home Equity Loan (2nd Fixed)

Preserves 1st mortgage; fixed predictable installment

8.25% Fixa
Total Monthly Payment (P&I)
$2.572/mês
($1602 + $970)
Estimated Upfront Closing Costs
$1.500
Total Interest Paid in 5 Years
$85.590
Total Interest Paid in 10 Years
$152.127
Economiza $123.988 vs Refi
💡 Why is 'Blended Rate' the golden rule for home equity?

If you owe $300,000 at 3.0% and borrow $100,000 at 8.5%, your true blended cost of capital is only ~4.38%! Resetting the full $400,000 at 6.85% forces you to pay almost 7% on debt you already had locked in at 3%.

How it works

1

Enter your home's estimated market value and your current 1st mortgage outstanding balance.

2

Input your existing locked interest rate and remaining amortization term in years.

3

Specify your desired cash-out equity amount for home renovations, debt payoff, or investment capital.

4

Compare side-by-side scenarios: Cash-Out Refinance vs Variable HELOC vs Fixed 2nd Mortgage.

Frequently asked questions

What is a Blended Interest Rate and why is it crucial?

Your blended rate represents the weighted average interest rate across both debts. Keeping a $300k balance at 3% and taking a $100k second loan at 8.5% creates an effective blended rate of ~4.38%—saving you tens of thousands compared to refinancing the entire $400k balance at 6.85%.

What is the difference between a HELOC and a Home Equity Loan?

A HELOC (Home Equity Line of Credit) is an open revolving credit line with a variable interest rate and an initial 10-year interest-only draw period. A Home Equity Loan is a closed-end second mortgage disbursed as a single lump sum with a fixed interest rate and fixed monthly payments.

What is Combined Loan-to-Value (CLTV)?

CLTV is the sum of your first mortgage balance plus your new equity borrowing, divided by your property's appraised value. Most conventional lenders cap CLTV at 80% to 85% to mitigate default risk.

Is interest on a HELOC or Home Equity Loan tax-deductible?

Under IRS rules, interest paid on up to $750,000 of qualified residence debt is deductible if the borrowed funds are strictly used to buy, build, or substantially improve the home securing the loan.

Is this tool free?

Yes. The site is supported by ads, so you never pay or need to create an account.

Does it work on mobile?

Yes. The page adapts to your screen and does not require installing any app.